Sales Rise, But Goodyear Posts Net Loss for Half
(Tire Review/sg) Even as it saw second quarter sales rise some US$183 million, Goodyear Tire & Rubber Co. still posted a $118 million first half 2007 net loss. Sales for the quarter reached $4.9 billion, up 4 per cent year-over-year, and the company said strong sales from three of its tyre units pushed a tyre sales increase of 15 per cent. At the same time, Goodyear said, total tyre units sales fell for the half.
Total first half sales reached $9.4 billion, up from $9.2 billion posted for the first half of 2006. Goodyear’s North American Tire unit saw sales drop for both the second quarter and first half. For the quarter, North American Tire posted sales of 2.28 billion, down from $2.34 billion last year; sales for the half hit $4.29 billion, down from 2006’s $4.58 billion. In unit sales, North American Tire was down 2.5 million tyres for the quarter and 6.8 million tyres for the half. Goodyear said the unit decrease was driven by discontinued private brand business, softness in the truck tyre market, and weak OE sales.
Second quarter operating income increased 783 per cent compared to the 2006 period due to improved pricing/product mix of $69 million that offset increased raw material costs of approximately $25 million, Goodyear said. “Our strong second quarter performance demonstrates successful execution against our strategies to improve our business and product mix as well as the early stage benefits of a lower cost structure,” said Robert Keegan, chairman and CEO. “With the actions we have taken the past four and a half years, we have created strong platforms for growth going forward. Likewise, our improving balance sheet gives us the flexibility to increase investments aimed at growing our core consumer and commercial tyre businesses.”
In the European Union second quarter sales increased 6 per cent to $436 million, the result of, according to Goodyear, improved pricing and product mix as well as a favourable impact from currently translation of more than $80 million, which more than offset lower volume. During the second quarter 15 million Goodyear tyres were sold in the EU, as opposed to 15.7 million a year earlier.