Goodyear Reports 15% jump in year on year sales

The Goodyear Tire & Rubber Company today reported improved tire unit volumes, higher sales and a net profit in the second quarter of 2010. “We are very pleased with our strong performance in the second quarter and first half of the year,” said Richard J. Kramer, president and chief executive officer.

He added saying, Our businesses continue to perform better than a year ago as they capture the benefits of recovering industry demand, strong new product performance and solid productivity improvements. We are clearly on the right path as our strategies position us to grow profitably as markets continue to improve.”

Kramer noted that improved results in the company’s North American Tire business unit made a significant contribution to Goodyear’s second quarter success. “These results are further evidence of the effectiveness of our strategy to drive innovation, improved mix and operational efficiency in the business,” he said.

Goodyear’s second quarter 2010 sales were $4.5 billion, up by 15 percent from the 2009 quarter. Second quarter sales reflect the $304 million impact of a 10 percent increase in tire unit volume due to improved global demand. Sales were also positively impacted by $161 million from higher sales in other tire-related businesses, primarily third-party chemical sales in North America and by improved price/mix. Unfavorable foreign currency translation reduced sales by $37 million. The company had segment operating income of $219 million in the second quarter of 2010, up from $24 million in the year-ago quarter. Compared to last year, second quarter segment operating income reflects higher global demand, strong price/mix performance and cost reduction actions.Improved price/mix of $121 million in 2010’s second quarter more than offset $54 million in net higher raw material costs ($89 million before raw material cost reduction actions). Unfavorable foreign currency translation reduced segment operating income by $14 million.

The 2010 second quarter included charges of $8 million (3 cents per share) due to rationalizations, asset write-offs and accelerated depreciation, and $3 million (1 cent per share) for a one-time importation cost adjustment, and a gain of $8 million (3 cents per share) on asset sales. All amounts are after taxes and minority interest. Goodyear’s second quarter 2010 net income was $28 million (11 cents per share), compared with a loss of $221 million (92 cents per share) in the 2009 quarter. All per share amounts are diluted.“Raw material costs remain a challenge and we continue to see an uncertain economy, but we remain focused on the proven strategies that have enabled us to address these headwinds over time,” Kramer said.