Goodyear NA: Consumer market will drop
The Goodyear Tire & Rubber Co.’s announcement that its second quarter 2012 net income nearly doubled is also good news for the company’s North American business segement.
Second quarter 2012 sales of Goodyear’s North American Tire increased 2% from last year to $2.5 billion, a second quarter record.
Goodyear says that sales reflect improved price/mix, which drove a 10% increase in revenue per tire, excluding the impact of foreign currency translation, compared to 2011's second quarter. Replacement tire shipments were down 10%. Original equipment unit volume increased 24%.
Second quarter 2012 segment operating income of $188 million was up 37% from the prior year and a record for any quarter. Improved price/mix of $176 million more than offset $114 million of higher raw material costs. Segment operating income also benefited from approximately $20 million in savings related to the closure of a tire plant in Tennessee, while other tire related income and higher pension expense were offsets.
"We remain confident that long-term growth in the global tire industry will continue, but at a slower pace near term than previously forecast due to continued economic challenges, particularly in Europe," Kramer said.
Goodyear now expects that its full-year tire unit volume for 2012 will be approximately 5% to 7% below 2011.
For the full year of 2012 in North America, Goodyear expects the consumer replacement market to be down between 1% and 3%, consumer original equipment up between 5% and 10%, commercial replacement to be down between 5% and 10% and commercial original equipment up between 10% and 15%.