Goodyear reports higher second quarter earnings on 24% sales growth

AKRON, Ohio– The Goodyear Tire & Rubber Company today reported record sales and higher earnings for the second quarter of 2011.

“I’m very pleased with our outstanding second quarter results, which represent another step on the path toward our 2013 targets,” said Richard J. Kramer, chairman and chief executive officer. “They present confirmation that our strategies are right and that they are working,” he added.

“Earnings growth in North America is a key outcome of our strategies. North American Tire’s second quarter results show the type of performance we should be able to sustain once we reach our 2013 targets,” Kramer said.

Goodyear’s second quarter 2011 sales were $5.6 billion, up 24 percent from a year ago and the highest ever achieved by the company in any quarter. Tire unit volumes totaled 42.9 million, down 2 percent from 2010, primarily reflecting weaker industry volumes, particularly in the North American consumer tire business.

Second quarter sales also reflect strong price/mix improvements, which drove revenue per tire up 18 percent over the 2010 quarter, excluding the impact of foreign currency translation.

“All of our businesses continued to make solid progress in driving improved price/mix through innovative product offerings in targeted market segments,” Kramer said.

Second quarter sales were also impacted by a $221 million increase in sales in other tire-related businesses, primarily in North America, and favorable foreign currency translation of $348 million.

The company had segment operating income of $382 million in the second quarter of 2011. This was up $163 million from the year-ago quarter and a second quarter record. Segment operating income reflected improved price/mix of $554 million, which more than offset $428 million in higher raw material costs ($381 million net of raw material cost reduction actions).

Goodyear’s second quarter 2011 net income available to common shareholders was $40 million (16 cents per share), compared with $28 million (11 cents per share) in the 2010 quarter. All per share amounts are diluted.

The 2011 second quarter included total charges of $66 million (27 cents per share) due to rationalizations, asset write-offs and accelerated depreciation, financing fees of $53 million (22 cents per share) related to the early partial redemption of 10.5% senior notes, $7 million (3 cents per share) related to discrete tax charges, and $3 million (1 cent per share) in costs related to tornado damage at a manufacturing facility; and a gain of $10 million (4 cents per share) on asset sales. All amounts are after taxes and minority interest.

Source: Cision Wire