Goodyear Tire & Rubber Co. reported net income of $74 million on record first-quarter sales of $4.9 billion for the period ending March 31, 2006. That compares to income of $68 million on sales of $4.7 billion for 1Q 2005.
Goodyear says the nearly 2% increase in sales was due to higher pricing and a more-favorable product mix, largely in the company's North American Tire business. (The impact of currency translation reduced sales by approximately $74 million.)
The year-ago quarter included approximately $79 million in sales from businesses divested during 2005.
"Sales increases were driven by strong revenue per tire growth of 7% as we focus our efforts on the high performance, profitable segments of the tire market," says Robert Keegan, chairman, CEO and president.
"The execution of our key strategies is delivering solid results despite a more difficult environment and a tough year-ago comparison."
The 2006 quarter benefited from after-tax items including favorable settlements with certain raw material suppliers of $32 million, a pension plan change in Latin America of $13 million, and income of $10 million from a Latin American legal settlement. Negatively impacting the quarter was an after-tax charge of $30 million for restructuring.
Operating income for the first quarter was $311 million, a 7% increase compared to $292 million in the same period in 2005.
Here are Goodyear's results by business segment.
North American Tire: operating income, $43 million; sales, $2.2 billion; tire units sold, 23.7 million.
North American Tire sales were a first quarter record and 5% higher than in 2005, driven primarily by favorable pricing and product mix and growth in other tire related businesses. Goodyear says these factors offset softer volume, especially in the private label replacement market.
Segment operating income was positive for the eighth consecutive quarter.
European Union Tire: operating income, $72 million; sales, $1.1 billion; tire units sold, 15.6 million.
Eastern Europe, Middle East and Africa Tire: operating income, $43 million; sales, $339 million; tire units sold, 4.6 million.
Latin American Tire: operating income, $102 million; sales, $396 million; tire units sold, 5.3 million.
Asia Pacific Tire: operating income, $22 million; sales, $353 million; tire units sold, 4.8 million.
Engineered Products: operating income, $29 million; sales, $395 million.
Goodyear will hold an investor conference call today at 11:30 a.m. EDT. Participating in the conference call with Keegan will be Richard Kramer, executive vice president and chief financial officer, and Darren Wells, senior vice president, business development and treasurer.
