ERJ staff report (LMH)
Akron, Ohio - Goodyear Tire & Rubber Co.'s North American Tire business made $130 million (Euro 100 million) in operating income in the third quarter 2012, a huge 67 percent rise year-on-year. The company said it expects 2012 North American earnings to exceed its 2013 target.
For the company as a whole, sales were $5.3 billion, down 13 percent from last year's record-setting total, reflecting $592 million in lower tire unit volumes and $258 million in unfavorable foreign currency translation. Tyre unit volumes totaled 41.8 million, down 12 percent from 2011, primarily reflecting weaker volumes in Europe. Operating income was down $115 million at $348 million.
In North America, third quarter sales decreased 6 percent from last year to $2.4 billion. Replacement tyre shipments were down 10 percent, while original equipment unit volume increased 8 percent. Revenue per tyre increased 4 percent in 2012 compared to 2011.
Q3 operating income of $130 million was up 67 percent from the prior year, thanks to improved price/mix and lower raw material costs. It also benefited from about $20 million in savings related to the closure of a tyre plant in Tennessee.
Europe, Middle East and Africa Tire's third quarter sales decreased 21 percent from last year to $1.7 billion. Sales reflect a 22 percent decrease in tyre unit volume. Replacement tyre shipments were down 24 percent, largely due to economic weakness across the region, reduced winter tire demand resulting from warm weather conditions and aggressive competitor actions, Goodyear said. Original equipment unit volume was down 12 percent. Q3 operating income of $105 million was down $155 million from a year ago.
Latin American Tire's third quarter sales decreased 20 percent from last year to $520 million. Replacement tyre shipments were down 12 percent. Original equipment unit volume was flat. Operating income of $49 million was down $13 million from a year ago.
Asia Pacific Tire's third quarter sales decreased 6 percent from last year to $592 million. Replacement tyre shipments were down 4 percent. Original equipment unit volume was flat. Revenue per tyre was flat in 2012 compared to 2011, excluding the impact of foreign currency translation. Operating income of $64 million was 2 percent higher than last year. Goodyear said income was affected by costs related to the start up of a new factory in China. During the quarter, the company ceased operations at its plant in Dalian, China, which was replaced by the new, larger facility in nearby Pulandian.
"We achieved solid segment operating income in the third quarter, driven by our performance in North America. While we were impacted by the macroeconomic challenges we face in Europe, we continue to see the benefits of our actions to sustain profit margins in a weak volume environment," said Richard J. Kramer, Goodyear ceo.
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News release from Goodyear