Goodyear Tire & Rubber Co. recorded net income of $75 million on net sales $5.2 billion for the second quarter ended June 30, 2008. That compares to income of $56 million on sales of $4.9 billion for the same period in 2007.
Goodyear said second-quarter sales -- a quarterly record -- were the result of the following:
* improved pricing,
* a richer product mix, and
* the impact of favorable foreign currency translation.
Goodyear set the record despite lower volume in North America and Europe. The company's income-to-sales ratio was 14.3%.
Revenue per tire, excluding the impact of foreign currency translation, increased 9% over 2Q 2007, "reflecting worldwide gains in pricing and product mix generated by the company's successful strategy to focus on high-value-added tires," according to the company.
Compared to 2007, the North American Tire business operation's second-quarter unit volume was down 12%. The decline was most notable in the consumer original equipment market and in low-value-added segments of the consumer replacement market.
"Robust growth in our international operations, especially in emerging markets, more than offset the continuing weakness in the North American market," says Robert Keegan, chairman, CEO and president. "Our strategy to invest in emerging markets has resulted in a profitable and growing set of businesses.
"We remain confident in our ability to manage through the challenging near-term business conditions and are focused on maximizing business performance given the environment. At the same time, our long-term investment strategy positions us to capitalize on available, attractive market opportunities."
Total segment operating income from continuing operations was $330 million, up 6.5% from the year-ago period. Three of the four business units posted "significant improvement" in operating income. (The results below include comparisons to 2Q 2007 in parentheses.)
North American Tire: tire units, 18.3 million (down 12%); sales, $2.1 billion (down 6.4%); segment operating income, $24 million (down 54%).
Europe, Middle East and Africa Tire: tire units, 18.8 million (down 5%); sales, $2 billion (up 15%); segment operating income, $151 million (up 19.8%).
Latin American Tire: tire units, 5.4 million (no change); sales, $572 million (up 24.9%); segment operating income, $103 million (up 14.4%).
Asia Pacific Tire: tire units, 5.4 million (up 12.5%); sales, $513 million (up 19.8%); segment operating income, $52 million (up 26.8%).
Goodyear made additional progress during the second quarter on its four-point cost savings plan, and increased its target to more than $2 billion in gross cost savings from 2006 through 2009. "We have achieved more than $1.4 billion in savings since beginning this plan, and remain on target to reach this higher level of savings," says Keegan.
