Goodyear reports record quarterly sales again
The Goodyear Tire & Rubber Company has reported record quarterly sales for the first three months of 2012, closing the books at US$5.5 billion, a 2% year-on-year increase from Q1 2011. This has come despite an 8% reduction in its sales volume to 43 million tyres.
“Favorable results in North America, in spite of the weak industry environment, are a clear indication of our success in delivering innovation, targeting profitable market segments and driving operational excellence. As expected, Europe, Middle East & Africa’s results were affected by weak economic conditions, which remain uncertain and warm winter weather,” said Richard J Kramer, chairman and chief executive officer.
A strong price/mix performance has resulted in a 16% year-on-year increase in revenue per tyre before foreign exchange rates are taken into account. Unfavourable unit volume and foreign currency translation reduced sales by $345 million and $108 million, respectively.
The company had segment operating income of US$292 million in the first quarter of 2012, down US$35 million from the year-ago quarter. Segment operating income reflected improved price/mix of US$525 million, which more than offset US$482 million in higher raw material costs (US$420 million net of raw material cost reduction actions).
Segment operating income was negatively impacted by US$54 million in lower volume and higher under-absorbed fixed costs of approximately US$6 million. Cost inflation along with inefficiencies related to a plant closing in North America and poor productivity at factories in France more than offset the benefit of cost saving programs.
In the Asia Pacific region, first quarter sales rose 5% to US$577 million. OEM unit volume increased 7%, but replacement tyre shipments were down 11%. The Thai floods and reduced consumer demand throughout Asia have in effect overshadowed growth in the Chinese market. Per tyre revenue increase 9% from 2011 before foreign exchange effects, which further increased sales by US$7 million.
Goodyear expects long-term growth in the global tyre industry to continue, but at a slower pace than previously forecast due to continued economic weakness in multiple markets. Due to the weaker than expected first quarter volumes, the company expects that its full-year tire unit volume for 2012 will be approximately 2% below 2011.
KON
