GOODYEAR Tire & Rubber Company reported results for the fourth quarter and full-year of 2012, stating that its performance marks the second consecutive year its has exceeded US$1.2 billion in segment operating income in a low-volume environment.
“These results have been driven by North American Tire’s performance, which has momentum and, more importantly, sustainability,” said Richard J. Kramer, chairman and chief executive officer.
He also said that the company’s strategic investments in China and last year’s positive progress in the North American, Latin American and Asia Pacific businesses are reaping benefits for the company.
Meanwhile, the company is reducing its segment operating income for 2013 in lieu of the sluggish economy in Europe, as part of its measures to ensure long-term competitiveness in the region.
Goodyear’s fourth quarter 2012 sales were US$5 billion, down 11% from 2011, reflecting US$338 million in lower tyre unit volumes, US$221 million in lower sales in other tyre related businesses, most notably third party chemical sales in North America, and US$85 million in unfavourable foreign currency translation.
Tyre unit volumes totalled 40 million, down 7% from 2011, primarily reflecting lower volumes in Europe. Sales benefited from price/mix improvements, which pushed revenue per tyre up 1% over the 2011 quarter, excluding the impact of foreign currency translation.
Meanwhile, the company reported segment operating income of US$272 million in the fourth quarter of 2012, which was up 39% from the year-ago quarter, reflecting US$191 million in lower raw material costs (before the benefit of cost savings actions), improved price/mix of US$20 million and the results of cost-reduction activities, partially offset by US$57 million in lower tyre volume and associated unabsorbed overhead costs of US$119 million. It’s free cash flow from operations totalled US$701 million for 2012.
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