AKRON, OHIO (Commodity Online): The Goodyear Tire & Rubber Company, a leading tyre maker in the world has posted a rise in the net income to $249 million for the second quarter of the current fiscal on the back of 15% rise in sales reflecting increased tyre consumption globally.
The company on Thursday, reported improved tire unit volumes, higher sales and a net profit for the period. Commenting on the results, company’s President and Chief Executive Officer (CEO), Richard J. Kramer said, “Our businesses continue to perform better than a year ago as they capture the benefits of recovering industry demand, strong new product performance and solid productivity improvements. We are clearly on the right path as our strategies position us to grow profitably as markets continue to improve."
Kramer noted that improved results in the company’s North American Tire business unit made a significant contribution to Goodyear’s second quarter success. Goodyear’s second quarter 2010 sales were $4.5 billion, up 15% from the 2009 quarter. Second quarter sales reflect the $304 million impact of a 10% increase in tire unit volume due to improved global demand.
Sales were also positively impacted by $161 million from higher sales in other tire–related businesses, primarily third–party chemical sales in North America, and by improved price/mix. Unfavorable foreign currency translation reduced sales by $37 million.
The company had segment operating income of $219 million in the second quarter of 2010, up from $24 million in the year–ago quarter. Compared to last year, second quarter segment operating income reflects higher global demand, strong price/mix performance and cost reduction actions.
Goodyear’s second quarter 2010 net income was $28 million (11 cents per share), compared with a loss of $221 million (92 cents per share) in the 2009 quarter. All per share amounts are diluted.
"Raw material costs remain a challenge and we continue to see an uncertain economy, but we remain focused on the proven strategies that have enabled us to address these headwinds over time," Kramer said.
Considering the year-to-date performance of the company, Goodyear’s sales for the first six months of 2010 were $8.8 billion, up 18% from $7.5 billion in the 2009 period. Sales reflect the $703 million impact of a 12% improvement in tire unit volume due to higher global industry demand, as well as a $286 million increase in sales in other tire–related businesses, primarily third–party chemical sales by North American Tire, and by improved price/mix. In addition, favorable currency translation increased sales by $187 million.
The 2010 period also benefitted from $122 million in improved price/mix and $229 million in lower raw material costs compared to the first six months of 2009. Raw material costs reflect $73 million in actions taken to reduce their impact.
Goodyear’s year-to-date net loss of $19 million (8 cents per share) compares to a net loss of $554 million ($2.30 per share) in 2009’s first half. All per share amounts are diluted.
