Goodyear Tire & Rubber Co. recorded net income of $271 millon on net sales of nearly $4.2 billion for its third quarter ending Sept. 30, 2015. That compares to income of $161 million on sales of more than $4.6 billion for the same period last year.
Segment operating income was up 15.2%, from $520 million to $599 million -- a quarterly record for the company. The company's net income-to-sales ratio was 6.4%.
“We delivered outstanding earnings growth in the quarter and segment operating margin of more than 14%, overcoming macroeconomic challenges in some of our key international markets,” says Richard Kramer, chairman and chief executive officer.
“Our third quarter results demonstrate continued sustainable earnings growth and our sharp focus on disciplined execution of our strategy in both strong and challenging markets. With our strong year-to-date performance, we now see full-year segment operating income tracking to $2 billion, which would be more than double what we achieved just five years ago.”
Goodyear largely attributed the 10.1% decrease in quarterly net sales to unfavorable foreign currency translation of $430 million. The 15.2% increase in 3Q segment operating income was driven by favorable price/mix net of raw materials, partially offset by unfavorable foreign currency translation.
Third quarter net income was impacted by $84 million of U.S. tax expense following the release of the company’s U.S. tax valuation allowance in the fourth quarter of 2014. Due to tax credits and prior tax-loss carryforwards, the company does not expect to pay significant cash income taxes in the United States for about five years.
Tire unit volumes totaled 42.5 million for the third quarter of 2015, up 1% from last year, broken out as follows:
Original equipment unit volume: up 4%.
Replacement tire shipments: flat.
Goodyear’s net income for the first nine months of 2015 totaled $687 million on net sales of nearly $12.4 billion. That compares to income of $317 million on sales of close to $13.8 billion for the first nine months of 2014.
Also through three quarters, tire unit volume was up 1% to 124.1 million. OE unit volume was up 4%, while replacement tire shipments were flat.
For more information about Goodyear's 3Q results, see: U.S./Canada Lead the Way for Goodyear in 3Q.
