Sales up, income down for Goodyear during first quarter
Goodyear Tire & Rubber Co. posted sales of $4.5 billion for the first quarter, up 1% from the same period in 2006. However, Goodyear's first quarter 2007 operating income was $226 million, a $56 million drop from 1Q 2006.
For the first quarter of 2007, Goodyear reported a loss from continuing operations of $110 million versus income from continuing operations of $46 million achieved during the the first quarter of 2006.
Goodyear says its sales growth in global sales "was driven by Goodyear's three emerging market tire businesses, which were up 11% from last year.
"This growth offset a 10% decline in sales for Goodyear's North
American Tire business, which were impacted by the (Steelworkers) strike and an exit from certain segments of the private label tire business, which together reduced sales by about $200 million."
However, Goodyear reports that its revenue per tire was up 8% during 1Q 2006. "This reflected strong pricing and product mix, which
exceeded raw material cost increases in the quarter," says Bob
Keegan, Goodyear's chairman and chief executive officer.
"Our recovery from the strike is going much better than expected. We
restored production faster than anticipated and weaker consumer OE demand enabled us to sell more high-value-added tires into the replacement market," he said.
The Akron, Ohio-based tiremaker also has reduced its estimated impact of the strike to between $100 million and $120 million for the year, down from $200 million to $230 million.
In North America, Goodyear's sales were $2 billion, a 10% drop from the first quarter of 2006. This was "primarily due to reduced volume resulting from the impact of the USW strike and the exit of certain segments of the private label tire business.
"Sales also were impacted by weak markets, most notably for commercial truck tires."
Goodyear's North American Tire unit also suffered a segment operating loss during 1Q 2007, mainly due to the strike.