Goodyear Reports Fourth Quarter, Full-Year Results
The Goodyear Tire & Rubber Company today reported results for the fourth quarter and full-year of 2012. “Our 2012 performance marks the second consecutive year we have exceeded $1.2 billion in segment operating income in a low-volume environment,” said Richard J. Kramer, chairman and chief executive officer. “These results have been driven by North American Tire’s performance, which has momentum and, more importantly, sustainability,” he added. “In addition, we are beginning to see the benefits of the strategic investments we are making in China,” Kramer said.
“We feel very positive about the progress made in our North American, Latin American and Asia Pacific businesses in 2012 and are confident in our ability to continue delivering improved profitability,” he said. “As a result of our view of continued weakness in the European economy and its effects on the auto and tire industries, we are reducing our 2013 segment operating income expectation and are taking actions to ensure long-term competitiveness in the region.”
Goodyear’s fourth quarter 2012 sales were $5 billion, down 11 percent from 2011, reflecting $338 million in lower tire unit volumes, $221 million in lower sales in other tire related businesses, most notably third party chemical sales in North America, and $85 million in unfavorable foreign currency translation. Tire unit volumes totaled 40 million, down 7 percent from 2011, primarily reflecting lower volumes in Europe. Sales benefitted from price/mix improvements, which drove revenue per tire up 1 percent over the 2011 quarter, excluding the impact of foreign currency translation.
The company reported segment operating income of $272 million in the fourth quarter of 2012. This was up 39 percent from the year-ago quarter, reflecting $191 million in lower raw material costs (before the benefit of cost savings actions), improved price/mix of $20 million and the results of cost-reduction activities, partially offset by $57 million in lower tire volume and associated unabsorbed overhead costs of $119 million. See the note at the end of this release for further explanation and a segment operating income reconciliation table.
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