Published on November 4th, 2011 | by Daniel Sherman Fernandez0
Goodyear Reports All-Time Record Quarterly Sales Earnings
Goodyear has reported its third quarter 2011 sales and earnings were the best in its history. The Company’s quarterly net sales exceeded $6 billion for the first time ever. Commenting on the results performance, Richard J. Kramer, Chairman and Chief Executive Officer said, “I am very pleased with our performance. Our third quarter results are another step on the path toward our 2013 targets given the challenging market conditions in much of the world.”
“All four of our tire businesses set all-time quarterly sales records as our teams did an excellent job offsetting higher raw material costs with improved price/mix and selling new, innovative products in targeted market segments,” added Kramer. Goodyear’s third quarter 2011 sales were $6.1 billion, up 22 percent from a year ago and the highest ever achieved by the Company in any quarter. Tire unit volumes totaled 47.7 million, unchanged from 2010.
Third quarter sales reflect strong price/mix performance, which drove revenue per tire up 18 percent over the 2010 quarter, excluding the impact of foreign currency translation. Sales were also impacted by a $221 million increase in sales in other tire-related businesses, primarily chemical sales in North America, and favorable foreign currency translation of $175 million. The Company achieved segment operating income of $463 million in the third quarter, a record for any quarter. This was up $229 million from the year-ago period. Segment operating income for the third quarter of 2011 reflected improved price/mix of $739 million, which offset more than $554 million in higher raw material costs ($506 million net of raw material cost reduction actions).
“While our third quarter results are evidence of the fundamental improvements we have made to our business, we continue to see many opportunities to build on this success by driving efficient, standardized processes throughout our business,” Kramer commented further.
Goodyear’s third quarter 2011 net income available to common shareholders was $161 million (60 cents per share). This is the highest quarterly net income from Goodyear’s continuing operations in its history. The Company recorded a net loss of $20 million (8 cents per share) in the 2010 third quarter. All per share amounts are diluted.
The 2011 third quarter included total charges of $35 million (13 cents per share) due to rationalizations, asset write-offs and accelerated depreciation, and $4 million (1 cent per share) related to discrete tax charges; and a gain of $5 million (2 cents per share) on asset sales. All amounts are after taxes and minority interest.
Asia Pacific Tires
Third Quarter Nine Months
Segment Operating Income
Segment Operating Margin
Asia Pacific Tire’s third quarter sales increased 21 percent from last year to $628 million, a record for any quarter. Sales reflect strong price/mix performance and favorable foreign currency translation of $45 million. Tire unit volumes decreased 2 percent. Original equipment unit volume was down 5 percent. Replacement tire shipments were flat as increased volumes in China were offset by declines in other countries. Third quarter revenue per tire increased 17 percent in 2011 compared to 2010, excluding the impact of foreign currency translation.
Third quarter segment operating income of $63 million was $6 million higher than last year. The improved price/mix of $83 million, which offset more than $59 million in higher raw material costs. Segment operating income was positively impacted by $6 million in foreign currency translation and negatively impacted by $13 million in costs related to the start up of a new manufacturing facility in China.
“Our Asia Pacific business delivered another impressive quarter, building on a positive momentum we have had this year,” said Pierre E. Cohade, President of Goodyear Asia Pacific.
“We achieved record revenues fueled by the demand from China and India, coupled with our OTR business that supports the mining industry. Even with incremental start-up expenses associated with the ramp-up of our new factory in Pulandian, China, we delivered year-over-year segment operating income growth for the third quarter of 2011,” added Cohade.
“We launched our best ultra high performance tires, Eagle F1 Asymmetric 2 and Eagle F1 Directional 5 that have already made an impact in the luxury and mid sports performance-segments and are earning praise among automotive journalists and car enthusiasts. In addition, our “Lifetime Commitment to Safety” brand campaign in China won the Issue Management Award at the global SABRE Awards – one of the world’s most coveted PR industry awards. These achievements reflect our commitment to innovation and safety, which are core attributes to the Goodyear brand, combined with our dedicated associates and business partners make the difference for us in delivering continuous record breaking performances.” Cohade added.