AKRON (Oct. 28, 2011)—Goodyear reported record segment operating and corporate net income for the quarter ended Sept. 30, reflecting 22-percent higher sales and an improved price/mix that more than offset higher raw materials costs.
Segment operating income nearly doubled in the period to $463 million, while the net result rebounded from a loss of $20 million a year ago to earnings of $161 million. Sales revenue hit $6.06 billion, although unit tire sales were unchanged at 47.7 million.
Results for the first nine months were similar: segment operating income up 69 percent to $1.17 billion and sales up 24 percent to $17.1 billion. Net income of $303 million contrasted with a $39 million loss in 2010.
As a result, Goodyear said it expects global tire demand will continue to grow in 2011, although at the low end of ranges previously forecasted in all segments except the OE commercial sector. The company expects unit sales growth for the year to approximate that of its year-to-date growth rate of 1.6 percent.
Goodyear's North American Tire unit was solidly in the black in the quarter at $78 million on 17.5-percent higher sales of $2.56 billion. Tire unit volumes fell 8 percent to 16.6 million units, but revenue per tire was up 23 percent. Replacement tire shipments were down 10 percent, primarily reflecting weaker sales of low-value-added tires in the consumer tire business.
Sales were buoyed by $171 million from higher revenue from other tire-related businesses, primarily third-party chemical sales, as well as $13 million in favorable foreign currency translation, Goodyear said.
The Akron-based tire maker said it expects the full year 2011 consumer replacement industry to be flat, OE consumer demand up approximately 6 percent, commercial replacement up about 13 percent and OE commercial demand up about 50 percent.
Sales in the Europe, Middle East and Africa Tire unit increased 31.3 percent to $2.23 billion, on 8-percent higher unit volume, strong price/mix performance and favorable foreign currency translation of $101 million. Segment operating income nearly quadrupled to $260 million.
Latin American Tire's sales grew 14 percent to $651 million, but segment operating income of $62 million was down nearly 35 percent from a year ago.
Asia Pacific Tire's sales increased 21 percent to $628 million, on higher selling prices. Unit volume fell 2 percent. Operating income rose slightly to $63 million.
Goodyear anticipates its raw material costs for the fourth quarter will increase more than 30 percent, bringing the increase for the full year to 30 percent over 2010.