ERJ staff report (LMH)
Akron, Ohio – Goodyear Tire & Rubber Co. says operating income in the first quarter of 2013 totalled $302 million, up 3 percent from the year ago quarter, reflecting $230 million in lower raw material costs and “cost reduction activities”.
Sales for the quarter were $4.9 billion, down from $5.5 billion a year ago. Goodyear said in its 26 April Q1 report that the sales reflect lower tire unit volumes and lower sales in other tire related businesses, as well as unfavourable foreign currency translation. Tire volumes totalled 39.5 million, down 8 percent from Q1 2012, primarily reflecting lower volumes in Europe.
Europe remained tough for the tire maker, which reported operating income growth in all other regions. Operating income in the Europe, Middle East and Africa region was $31 million, $59 million below the prior year, Goodyear said. Sales fell 17 percent from 2012 to $1.6 billion, reflecting a 16 percent decrease in tire unit volume. Both original equipment and replacement tire volumes were down at 12 percent and 18 percent respectively.
However, in North America, Goodyear reported earnings of $127 million, up 59 percent, a new first-quarter record, despite a 13 percent decrease in sales, which totalled 2.2 billion. Goodyear said sales reflected a 6 percent decrease in tire unit volume, but operating income was positively impacted by lower raw material costs.
Equally, sales fell in Latin America also, down $8 million from Q1 $2012-$530 million. Operating income for the region was up 9 percent at $60 million.
In Asia-Pacific, operating income was up 25 percent from last year totalling $84 million, a first-quarter record for the region, Goodyear said. Sales however decreased $10 million to $567 million.
Goodyear said it was now forecasting its 2013 tire unit volumes to be “essentially at 2012 levels as a result of weak industry conditions, especially in Europe.” The company said that due to continued weakness in the European economy, it is implementing a “three point plan to return its business to historical margin levels”.
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News release from Goodyear