Goodyear Has Record First Quarter
Goodyear Tire & Rubber Co. reported a net income of $74 million for the first quarter of the year against record first quarter sales of $4.9 billion. Sales for the quarter were up 2 per cent compared to the same period last year, while the net income results were up 9 per cent versus the first quarter of 2005.
Sales declined 5 per cent in the European Union Tire business compared to the first quarter of 2005, which was the strongest first quarter in the unit’s history. Price and product mix improvements were not enough to offset unfavourable currency translation of approximately $98 million and lower volume in the consumer replacement market.
European Union Tire segment operating income declined as continued pricing and product mix improvements of $33 million did not fully offset higher raw material costs of approximately $42 million. The business received $6 million from favourable supplier settlements, but was also negatively affected by factors including higher manufacturing costs, lower volume and approximately $5 million of currency translation.
Goodyear’s North American Tire unit posted quarterly sales of $2.24 billion, up 5 per cent from last year, but against lower units sales – 23.7 million tyres in 2006 versus 25.4 million for the first quarter of 2005. The result was operating income of $43 million for the 2006 period compared to $11 million last year.
“Sales increases were driven by strong revenue per tire growth of 7 per cent as we focus our efforts on the high performance, profitable segments of the tyre market,” said Robert Keegan, Goodyear’s chairman and CEO. “The execution of our key strategies is delivering solid results despite a more difficult environment and a tough year-ago comparison.”