Goodyear reports 2Q net loss of $73.6 million despite increased sales
Goodyear Tire & Rubber Co. reported a net loss of $73.6 million for the second quarter of 2003. That compares to net income of $28.9 million in the second quarter of 2002.
However, Goodyear's second-quarter sales totaled $3.8 billion, an increase of 8% from the same period last year. Sales were favorably impacted by currency translation, estimated at $169 million; Goodyear also cited improved brand, customer and product mix as a reason for the positive sales result.
"Our international tire businesses, as well as our Engineered Products and Chemicals units, continue to perform well, and five of our businesses have recorded improved year-over-year segment operating income for five
consecutive quarters," said Bob Keegan, Goodyear's chairman, CEO and president.
"In North America, our Goodyear brand gained market share in both the consumer and commercial replacement tire markets during the quarter, and we continue to implement our cost-cutting and turnaround strategies. We have numerous obstacles to overcome, including continued weakness in the U.S. economy, but we remain confident that our strategies are solid."
Quaterly tire unit volume decline 1% year to year, from 53.3 million in 2002 to 52.8 million.
Second-quarter results included an after-tax rationalization charge of $13.4 million for salaried staff reductions and manufacturing consolidations in North America, Europe, Latin America and Asia, and an after-tax loss of $7 million on asset sales.
Goodyear says the single most important factor in the deterioration of its operating performance was an increase in raw material costs of approximately $124 million, offset in part by cost reduction actions, improved price and mix and an estimated currency translation benefit of approximately $9 million.
For the first half, Goodyear reported a net loss of $236.9 million on sales of $7.3 billion, compared to a $34.2 million loss on sales of $6.8 billion for the first half of 2002 (first-half 2002 results included a segment operating income benefit of
approximately $10 million resulting from the company's participation in the Ford Motor Co. tire replacement program).
The company says tire price improvements had a favorable impact on sales for the first six
Goodyear's tire unit volume for the first half decreased less than 1% compared to the first six months of 2002 -- from 106.3 million to 105.4 million.
In North America, operating income, sales and unit volume all decreased during the second quarter of 2003 compared to the same period last year.
Goodyear posted a quarterly operating loss of $2 million, compared to a $39.3 million gain during last year's second quarter. Sales of $1.69 billion were down 0.3%, while unit volume of 25.3 million decreased 4.1%.
For the first six months, Goodyear suffered an operating loss of $63.5 million (compared to a $12 million loss last year), while sales and unit volume decreased 2% and 4.7%, respectively.