Kramer calls Goodyear's 2Q results 'outstanding'
Goodyear Tire & Rubber Co. posted net income of $181 million on net sales of nearly $4.9 billion for the second quarter ended June 30, 2013. That compares to income of $85 million on sales of $5.1 billion for the same period last year.
Segment operating income was up 27%, from $336 million to $428 million, a second-quarter record. The company's income-to-sales ratio was 3.7%.
“Our outstanding second quarter earnings demonstrate the disciplined execution of our strategies by Goodyear associates around the globe as our operations become more efficient, reliable and integrated,” says Richard Kramer, chairman, CEO and president. “We are leveraging this increased integration along with our product innovation to deliver sustainable earnings improvement through the cycle.
“We achieved significantly higher earnings, with record operating income in North America and Asia Pacific. Our objective remains to focus on profitable targeted market segments where we can capture the value of our brands and prepare ourselves to take advantage of the market recovery when it comes.”
All four of Goodyear’s regional businesses achieved higher operating income in the second quarter compared to the year-ago period. The only segment that didn't post higher tire unit volumes than last year was North America, which set a quarterly record for operating income.
North American segment, 2Q 2013
Tire unit sales: 14.8 million (down 3.9%).
Sales: $2.2 billion (down 10.2%).
Operating income: $204 million (up 8.5%).
Original equipment unit volume in North America was flat, according to Goodyear. Replacement tire shipments were down 5%, reflecting weaker industry demand and decreased sales of lower-value consumer tires.
Commenting on Goodyear’s performance in Europe, Kramer says the company is seeing signs of volumes stabilizing and is achieving success in the summer tire market with industry-leading label-graded tires that have won numerous magazine tests versus competitors."
Through the first six months, Goodyear recorded net income of $206 million (up 182%) on net sales of more than $9.7 billion (down 8.7%).
“Our strong first-half performance gives us confidence in our full-year outlook for global segment operating income, which we now expect to be about $1.5 billion, at the high end of our previously announced range of $1.4 billion to $1.5 billion, and the highest ever achieved by the company," says Kramer. "Additionally, we continue to target positive cash flow in 2013, excluding pension pre-funding.”
For the full year of 2013 in North America, Goodyear expects consumer replacement as well as commercial replacement and commercial original equipment markets to be at essentially 2012 levels. It expects consumer original equipment volumes to be up approximately 5%.