|Goodyear has reported a record net earnings of over $6.1 billion in the third quarter of the year. Up from 22% from the same quarter of 2010, this figure remains the best for Goodyear and it is the first time that the American tyre makers hit above the $5 billion mark. Its tyre unit volumes totaled 47.7 million, unchanged from 2010.|
Operating income reached $463 million, up from $229 million last year, while returns to shareholders achieved $161 million (60 cents per share). In other words, Goodyear provides shareholders their highest quarterly net income this quarter from a net loss of $20 million (8 cents per share) in the same quarter last year.
Spurred by the price/mix performance, which drove revenue per tyre up 18% over the previous 3rd quarter, the astounding sales figures exclude foreign currency factors. Sales were also impacted by a $221 million increase in sales in other tyre-related businesses, primarily chemical sales in North America, and favorable foreign currency rates of $175 million. Other financial factors included; total charges of $35 million (13 cents per share) due to rationalizations, asset write-offs and accelerated depreciation, and $4 million (1 cent per share) related to discrete tax charges; and a gain of $5 million (2 cents per share) on asset sales. All amounts are after taxes and minority interest.
In the Asia Pacific region, tyre sales increased 21% from last year to $628 million, also a record for any quarter. Sales reflect strong price/mix performance and favorable foreign exchanges of $45 million. Tyre unit volumes decreased 2 percent. Original equipment unit volume was down 5 percent. Replacement tyre shipments were flat as increased volumes in China were offset by declines in other countries. Third quarter revenue per tyre increased 17 percent in 2011 compared to 2010, excluding the impact of foreign currencies.
Third quarter segment operating income of $63 million was $6 million higher than last year. Improved price/mix of $83 million more than offset $59 million of higher raw material costs. Segment operating income was positively impacted by $6 million in foreign currencies and negatively impacted by $13 million in costs related to the start up of a new manufacturing facility in China.
This year, Goodyear’s newest ultra high performance tyres; the Eagle F1 Asymmetric 2 and Eagle F1 Directional 5 have contributed largely to the company’s luxury and sports performance segment which translates to better sales. In addition, the ‘Lifetime Commitment to Safety’ brand campaign in China yielded Goodyear the Management Award at the global SABRE Awards – one of the world’s most coveted PR industry awards which indirectly increased brand identity.
“I am very pleased with our performance,” said Richard J. Kramer, chairman and chief executive officer. “Our third quarter results are another step on the path toward our 2013 targets and especially meaningful given the challenging market conditions in much of the world.”
Pierre E. Cohade, president of Goodyear Asia Pacific commented, “Our Asia Pacific business delivered another impressive quarter, building on a positive momentum we have had this year. We achieved record revenues fueled by the demand from China and India, coupled with our OTR business that supports the mining industry. Even with incremental start-up expenses associated with the ramp-up of our new factory in Pulandian, China, we delivered year-over-year segment operating income growth for the third quarter of 2011.”