Goodyear Reports Record Sales, Higher Earnings for First Quarter

The Goodyear Tire & Rubber Company today reported higher tire unit  volumes, record sales and higher earnings for the first quarter of 2011.

 

“I am very pleased with our outstanding first quarter results, they are  an excellent first step on our path to our 2013 targets, and improvement in North American Tire is a critical element to achieving our targets.  “Said Mr. Richard J. Kramer, Chairman and Chief Executive Officer. North American Tire’s first quarter performance strengthens my confidence in our future,” he added. All of our businesses made great progress in offsetting higher raw material costs through improved price/mix and in driving sales of new, innovative products.”

 

Goodyear’s first quarter 2011 sales were $5.4 billion, up 27 percent from the 2010 quarter and the highest ever achieved by the company in any quarter.  Tire unit volumes totaled 46.8 million, up almost 7 percent from 2010.

 

First quarter sales reflect a $219 million increase in volume.  Sales also benefited from strong price/mix improvements, which drove revenue per tire up 15 percent over the 2010 quarter, excluding the impact of foreign currency translation.

 

“Our outstanding revenue-per-tire performance reflects a continued focus on developing and selling innovative products in targeted market segments,” Kramer said.

 

First quarter sales were also impacted by a $276 million increase in sales in other tire-related businesses, primarily third-party chemical sales in North America, and favorable foreign currency translation of $125 million.  The company had segment operating income of $327 million in the first quarter of 2011, up $87 million from the year-ago quarter. Segment operating income reflected higher volume as well as improved price/mix of $361 million, which nearly offset $385 million in higher raw material costs ($352 million net of raw material cost reduction actions).  Goodyear’s first quarter 2011 net income was $103 million (42 cents per share), compared with a net loss of $47 million (19 cents per share) in the 2010 quarter.  All per share amounts are diluted.

 

The 2011 first quarter included total charges of $18 million (7 cents per share) due to rationalizations and accelerated depreciation and $6 million (2 cents per share) related to discrete tax charges.  All amounts are after taxes and minority interest.

 

Asia Pacific Tire’s first quarter sales increased 14 percent from last year to $551 million, a first quarter record.  Original equipment unit volume was flat.  Replacement tire shipments were down 4 percent.  First quarter revenue per tire increased 8 percent in 2011 compared to 2010, excluding the impact of foreign currency translation.  Favorable foreign currency translation increased sales by $36 million.

 

First quarter segment operating income of $67 million was $2 million lower than last year. The 2011 quarter was impacted by improved price/mix of $44 million, which more than offset $37 million of higher raw material costs.  Segment operating income was also impacted by $7 million in costs related to the planned start up of a new factory in China.

 

“Goodyear in Asia continues to ride on a growth momentum to achieve another record breaking sales performance for the first quarter of 2011.  When adjusted for incremental start-up expenses for our newest plant in Pulandian, China, we also achieved our highest-ever EBIT quarter, delivering another quarter of year-over-year earnings improvement, “said Pierre Cohade, President of Goodyear Asia Pacific.  “Our performance, fueled by China and India, is reflective of the strong focus we have had on driving innovations across the business and in everything we do,” he said.

 

“The first quarter of 2011 picked up where 2010 ended, with Goodyear Asia Pacific winning more accolades and recognitions from the automotive media, our customers, business partners and noteworthy institutions for our product innovations, work quality, CSR initiatives and our brand,” said Cohade. “These wins are proof that our strategy, coupled with increased efforts to improve customer satisfaction and employee engagement, is working to our advantage.  I thank our hard working associates and business partners for another record breaking quarter,” he added.