Improvement in Americas but Europe tough for Goodyear

ERJ staff report (LMH)

Akron, Ohio – Goodyear Tire & Rubber Co. saw sales of $21 billion (Euro 15.6 billion) in 2012, down 8 percent from $22.8 billion in 2011. Operating income of 1.2 billion was down 120 million, reflecting continued weakness in the European market, though this was partially offset by improvement in North America, Goodyear said in its annual report.

"Our 2012 performance marks the second consecutive year we have exceeded $1.2 billion in segment operating income in a low-volume environment," said CEO Richard Kramer. "These results have been driven by North American Tire's performance, which has momentum and, more importantly, sustainability.”

He added that the company is beginning to see the benefits of strategic investments it is making in China, and Goodyear remains positive about the progress made in North and Latin America, as well as in the Asia-Pacific region.

In North America, fourth quarter sales decreased 10 percent from last year to $2.3 billion. Replacement tire shipments were down 10 percent, while original equipment unit volume increased 9 percent. Operating income of $116 million was up $95 million year-on-year. This was partially due to savings related to the closure of a tire plant in Tennessee, Goodyear said.

In Europe, Middle East and Africa, fourth quarter sales decreased 16 percent to $1.6 billion, reflecting a 15 percent decrease in tire unit volume. Replacement tire shipments rose 17 percent and OE unit volume was down 9 percent. Operating income of $38 million was down $50 million in 2011, reflecting lower unit volume.

In Latin America, fourth quarter sales decreased 9 percent from last year to $541 million. Replacement tire shipments were up 2 percent, while OE equipment unit volume was down 6 percent. Operating income of $61 million was up 13 million year-on-year.

In Asia-Pacific, fourth quarter sales decreased $3 million to $588 million. Replacement tire shipments were down 1 percent, but only unit volume was up 14 percent. Operating income in the region was up $18 million at $57 million.

Kramer said the company was confident about 2013 but as a result of continued weakness in the European economy, it is "reducing our 2013 segment operating income expectation and taking actions to ensure long-term competitiveness in the region."

This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.

Press release from Goodyear