Goodyear North American Tire sales rise 20%
Financially, Goodyear Tire & Rubber Co. had a record year globally in 2011. How did it fare in the United States and Canada?
Goodyear posted record sales last year (see "Goodyear posts record 2011 sales of $22.7 billion"). Its North American Tire business unit accounted for 43.3% of that -- $9.8 billion.
Here are the 2011 results for North American Tire (with comparative 2010 results in parentheses).
Tire units: 66 million (66.7 million).
Sales: $9.8 billion ($8.2 billion).
Segment operating income: $276 million ($18 million).
Segment operating margin: 2.8% (0.2%.
In the fourth quarter, Goodyear's unit sales were down 1.7% to 16.6 million. Sales (nearly $2.6 billion), segment operating income ($21 million) and segment operating margin (0.8%) were all up compared to 4Q 2010.
Goodyear's analysis of North American Tire
"North American Tire’s fourth quarter 2011 sales increased 17% from 2010 to
$2.6 billion, a record for any quarter. Sales reflect improved price/mix, which drove a 19% increase in revenue per tire, excluding the impact of foreign currency translation, compared to 2010’s fourth quarter.
"Tire unit volumes decreased 2%. Original equipment unit volume was up 7%. Replacement tire shipments were down 3%, primarily reflecting lower industry demand. Sales were positively impacted by $118 million from higher sales in other tire-related businesses, primarily third-party chemical sales.
"Fourth-quarter 2011 segment operating income of $21 million was $10 million above the prior year. Improved price/mix of $289 million more than offset $241 million of higher raw material costs. Fixed cost recovery due to higher utilization rates contributed $15 million to segment operating income. Segment operating income also benefited from a $21 million reduction in SAG expenses primarily related to lower general and product liability expense, offset by costs resulting from manufacturing inefficiencies primarily related to the closure of a factory in Tennessee.
"Segment operating income also was negatively impacted by $20 million in lower profits from other tire-related businesses, primarily third-party chemical sales, and $15 million in higher USW profit sharing expense."