Goodyear Shows Income Improvement Despite Sales Fall Off - Tire Review Magazine

Goodyear Shows Income Improvement Despite Sales Fall Off

The first six months of 2013 have not been kind to tiremakers, including Goodyear Tire & Rubber Co., which today reported a 9% drop in first half sales and a 4% fall off in tire unit sales.

Despite those results, the tiremaker still turned a 16% improvement in operating income ($730 million) and $206 million in net income, up year-over-year from $73 million.

First half sales reached $9.7 billion, Goodyear said, down YoY from $10.7 billion. “Sales reflect $329 million in lower tire unit volumes,” said Goodyear, “$309 million in lower sales in other tire-related businesses, most notably third party chemical sales in North America, and $175 million in unfavorable foreign currency translation.”

Global tire unit volumes totaled 79 million, down 4% from the same period in 2012. But while every other tire segment showed unit sales improvements in the second quarter, North America continued to lose unit sales ground. Tire unit sales in the first half reached 29.6 million, down from 31.2 YoY, with second quarter unit sales at 14.8 million, down from 15.4 million last year.

Driven by falloffs in both OE and replacement sales, North American Tire’s sales for the first half were $4.37 billion, down from 2012’s $4.95 billion, the company reported. Still, second quarter 2013 segment operating income of $204 million was a 9% improvement over the prior year and a record for any quarter, and first half operating income came in at $331 million.

“We anticipate volume growth in the second half of 2013 compared to last year, with a
3% to 5% increase in the third quarter driven by continued improvement in emerging markets and slow but steady recovery in mature markets,” said Rich Kramer, chairman and CEO.

“We achieved significantly higher earnings, with record operating income in North America and Asia Pacific,” he said. “Our objective remains to focus on profitable targeted market segments where we can capture the value of our brands and prepare ourselves to take advantage of the market recovery when it comes.”

For the full year of 2013 in North America, Goodyear expects consumer replacement as well as commercial replacement and commercial OE markets to be at essentially 2012 levels, while consumer OE volumes are anticipated to be up about 5%.

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