ERJ staff report (TB)
Akron, Ohio -- Goodyear reported record sales and earnings for the quarter and year ended Dec. 31, reflecting a strong price/mix ratio that drove up revenue per tire for both periods.
Goodyear's fourth quarter 2011 sales hit $5.68 billion, up 12 percent from 2010, while full-year sales increased 20.9 percent to a record $22.8 billion from $18.8 billion in 2010. Goodyear said revenue-per-tire increased 17 percent over 2010, excluding the impact of foreign currency translation.
Goodyear said the increase for the fourth quarter was offset by weaker unit volume sales and unfavorable foreign currency translation, which effectively reduced sales by about $174 million and $49 million, respectively. Unit volume for the full year was flat compared with 2010, while favorable foreign currency translation increased sales by $599 million.
The Akron-based tire maker's full-year segment operating income hit a record of nearly $1.4 billion, up 49 percent from 2010. However, fourth quarter segment operating income reached only $196 million, down $28 million from the same period in 2010.
The company's North American Tire (NAT) unit achieved operating income of $276 million, its best performance since 2000, while its Europe, Middle East and Africa Tire unit reached a record $627 million for the year.
The company's Latin American Tire and Asia Pacific Tire units hit fourth quarter sales records of $596 million and $591 million, respectively.
â€œDespite lower fourth quarter unit volume, all four of our tire businesses achieved record fourth quarter and full-year sales as we improved price/mix and gained branded share in our targeted market segments,â€ said Richard Kramer, chairman and CEO.
In North America, the company's fourth quarter 2011 sales increased 17.4 percent to $2.58 billion, with OE unit volume up 7 percent and replacement shipments down 3 percent. Operating income for the quarter reached $21 million, and an improved price/mix of $289 million more than offset a $241 million-increase in raw material costs.
For the year, NAT reported a 15-fold increase in operating income to $276 million, while sales jumped 20.2 percent to $9.86 billion. Unit sales dropped 1 percent to 66 million.
For 2012, the company said it expects growth to continue globally but at a slower pace in the short-term than previously forecast. It anticipates that tire unit volume for the year will be essentially flat compared with 2011.
In North America, Goodyear said it expects the consumer replacement market to be flat or slightly down compared with 2011, while the OE market will range from flat to up 3 percent. Commercial replacement tires are expected to increase between 2 and 6 percent over 2010, while Goodyear said it believes OE sales will drop 20 to 25 percent.
The company also anticipated its raw material costs for the first quarter of 2012 will increase between 20 and 25 percent over the previous year. Small increases are expected for the second quarter, while the second half should decrease compared with the same period in 2011.
From Tire Business (A Crain publication)