Goodyear reports net loss for 1Q
Goodyear Tire & Rubber Co. reported a net loss of $163.3 million on sales of $3.54 billion for the first quarter ended March 31. That compares to a net loss of $63.2 million on sales of $3.31 billion for the first quarter of 2002.
The North American Tire business unit posted an operating loss of $61.5 million on sales of $1.6 billion. In 2002, the company suffered a first-quarter loss of $51.3 million on sales of $1.65 billion. Tire units also were down comparatively.
"We remain very pleased with the strength of our international tire businesses, Engineered Products and our Chemical units," says Robert Keegan, CEO and president. "Five of our businesses have recorded improved year-over-year segment operating income for four consecutive quarters.
"While North American Tire continues to struggle, we see room for optimism. We are aggressively cutting costs to make this business competitive, and we are encouraged by market share gains in this unit compared to the fourth quarter of 2002. We have much work left to do, but our turnaround is on track."
In North America, Goodyear's replacement and original equipment tire shipments were down 6.4% and 2.7%, respectively, compared to the same period a year ago (Goodyear supplied approximately 500,000 tires for the Ford Motor Co. tire replacement program during the first quarter of 2002). Here are more of the specifics (comparisons to first-quarter 2002 results are in parentheses):
North American Tire, 2003 first quarter
Tire units: 24.8 million (down 5.3%).
Sales: $1.59 billion (down 3.6%).
Operating loss: $61.5 million.
Operating margin: negative 3.9%.
Goodyear blames the operating loss on higher raw material costs, an unfavorable mix in the replacement market and lower volume.
Tire unit sales were up in the European Union Tire, Eastern Europe/Africa/Middle East Tire and Asia Tire business segments; they were down in the Latin American Tire segment. Worldwide, tire unit sales were down slightly compared to a year ago (52.6 million from 53 million).
Results for the first quarter of 2003 include after-tax rationalization charges of $65.2 million, the result of retail and administrative consolidations in North America, Europe and Latin America.