Goodyear announces 3Q net income of $36.5 million
Goodyear Tire & Rubber Co. reported net income of $36.5 million on sales of $4.7 billion for the third quarter ended Sept. 30, 2004. It is the second consecutive quarter of record sales and positive net income.
That compares to a net loss of $119.4 million on sales of $3.9 billion of the third quarter of 2003. (The net loss included a net after-tax rationalization charge of $44.8 million and an after-tax loss of $5.9 million on the sale of assets.)
The turnaround in net income and the 20.7% increase in sales was driven by improved operating results in all seven of its business segments compared to the third quarter of 2003, according to the company.
Tire unit volume improved from 55.3 million units to 57.4 million units, an increase of 3.8%.
While pleased with the company’s third quarter results, Chairman, CEO and President Robert Keegan says management remains focused on addressing the company’s current high debt levels and unfunded pension obligations with specific strategies, including the following:
* refinancing to lengthen debt maturities.
* potential asset sales to reduce obligations.
* seeking increased equity funding to improve Goodyear’s credit profile.
Goodyear´s North American Tire operation posted operating income of $13.5 million on sales of $2.07 billion for the third quarter. For the first nine months in North America, Goodyear recorded operating income of $16.2 on sales of $5.8 billion.
Domestic tire sales totaled 26.7 million units and 77.1 million units for the third quarter and first nine months of 2004, respectively.
Replacement volume increased 0.9% in the quarter vs. the same period in 2003, while comparative shipments to original equipment customers were down 2.2%.
Sales in North America increased 15.5% compared to the third quarter of 2003.
Third quarter results were driven by sustained growth in Goodyear-brand tires and stabilization in the private label tire business.
"As a result of our new Goodyear-brand products and the continued strength of our high performance and truck tire products, we gained share in the consumer replacement and the commercial OE and replacement markets in North America during the third quarter," says Keegan.
The rest of Goodyear´s operating units fared as follows:
* European Union Tire: operating income of $69.9 million on sales of $1.08 billion. Unit tire sales totaled 15.8 million.
* Eastern Europe, Middle East and Africa Tire: operating income of $59.8 million on sales of $344.6 million. Unit tire sales totaled 5.2 million.
* Latin American Tire: operating income of $63.7 million on sales of $315.7 million. Unit tire sales totaled 4.9 million.
* Asia/Pacific Tire: operating income of $18.7 million on sales of $319.4 million. Unit tire sales totaled 4.8 million.
* Engineered Products: operating income of $34.1 million on sales of $377.2 million.
* Chemical Products: operating income of $45.4 million on sales of $395.8 million.
As the company announced on November 5, it will file an amended 2003 Form 10-K that includes additional financial disclosures related to certain affiliates. The filing also will include a restatement of the company’s prior-period financial statements, including first and second quarter 2004 Form 10-Qs, to reflect after-tax expense adjustments of approximately $4.6 million.
Goodyear also will correct "a misclassification of deferred income tax assets and liabilities" in its Consolidated Balance Sheet at Dec. 31, 2003, which overstated total assets and total liabilities by approximately $360 million each.
Additional details of the restatement are available in the company’s third quarter 2004 Form 10-Q.