Goodyear Reports Record First Quarter Sales
(Akron/Tire Review) Goodyear Tire & Rubber Co continued posting positive results as its first quarter 2005, earning $68 million in profit against record first quarter sales of $4.8 billion.
The Akron Beacon Journal described the results as a “financial home run,” adding they greatly exceeded estimates from Wall Street analysts. The market watchers had thought Goodyear would earn 1 to 3 cents a share for the quarter ending 31 March. Analysts’ high estimate was 10 cents a share, with the lowest a loss of 2 cents. In fact the profits equated to 35 cents a share.
Goodyear’s long-struggling North American Tire unit also finished the quarter on the upside, with a 7.9 per cent unit sales increase in the replacement market. North America Tire showed sales of $2.14 billion, up from 2004’s $1.94 billion, and profits of $11 million, up from a $24 million loss last year.
On an overall basis, quarterly sales were up 11 per cent, while the $68 million in profit was up considerably from a 2004 first quarter loss of $78 million.
“By continuing to focus our resources on driving improvements in targeted markets, we see the benefits in both increasing competitiveness and earnings,” said Robert Keegan, chairman and CEO. “Our first quarter earnings improvement was driven by the European Union, North American, Latin American and Asia/Pacific tyre businesses, and our growth took place in a difficult environment of rapidly rising raw material costs.”
Goodyear did state that “while the company anticipates that its operating performance for the balance of the year will exceed its performance in the comparable period of 2004, the rate of gain is expected to be less than in the first quarter.”
It is also worth noting that, as of 1 January, the once separate chemical division was consolidated into the North American Tire group.
Sales for the North American Tire unit increased 10 per cent compared to the first quarter of 2004, thanks to higher volumes and “favorable pricing and product mix.” Consumer replacement unit sales were up 7.9 per cent, while commercial OE and replacement sales volumes jumped 14.9 per cent, Goodyear said.