Akron, Ohio – Goodyear Tire & Rubber Co. has posted a 3.5-percent drop in segment operating income to $531 million (€479 million) on second quarter sales of $3.9 billion, 7-percent lower than in the same three months of last year.
The result for the three months to 30 June featured an impressive 37-percent rise in earnings in the Europe, Middle East and Africa (EMEA) region offset by mainly one-off factors impacting the tire maker's business in the Americas.
Globally, tire unit volumes reached 41.5 million units, up 2 percent from 2015. This increase, said Goodyear, driven by growth in the Asia Pacific and Europe, Middle East and Africa regions. Replacement tire shipments were up 4 percent, but OE unit volumes were down 4 percent.
“Industry fundamentals remain favourable across many of our key markets and demand for our premium, high-value-added tires is strong,” added an upbeat Kramer.
At $1.3 billion, second quarter sales at Goodyear’s EMEA business came in about level with the prior-year amount.
A 4 percent increase in sales volume in the EMEA region was offset by unfavourable price/mix and foreign currency translation, the company said.
In the region, replacement tire shipments were up 3 percent and OE unit volume was up 8 percent.
But second quarter 2016 segment operating income of $148 million was 37 percent above the prior year on higher volume and lower selling, administrative and general expenses, Goodyear said.
At Goodyear’s Americas business unit, segment operating income in the quarter fell 19 percent to $291 million, due to the deconsolidation of the Venezuela unit, higher conversion cost, an out-of-period adjustment mostly linked to 2012 and related to the elimination of intra-company profit, as well as lower volume.
Sales in the unit fell 13.5 percent to $2.1 billion, reflecting a 6-percent drop in tire units sold, due mainly to the sale of the former Goodyear Dunlop Tires North America Ltd business and the deconsolidation of Venezuela. Replacement and OE tire shipments were down 2 and 15 percent, respectively.
First-half operating income in the Americas unit was down 9.1 percent to $551 million, while sales fell 13.2 percent to $4.0 billion, reflecting a negative currency translation of $225 million and the deconsolidation of Venezuela.
In Asia Pacific, Goodyear’s second-quarter sales increased 8 percent year-on-year to $528 million. Sales reflect a 21 percent increase in tire unit volume, primarily due to growth in Japan and China. This improvement was partially offset by negative currency translations. Replacement tire shipments were up 38 percent. Original equipment unit volume was up 1 percent.
Second quarter 2016 segment operating income of $92 million was up 10 percent in Asia Pacific and a record, driven by higher volume, Goodyear said.
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