Goodyear: Six of seven business units show improvement
Six of Goodyear Tire & Rubber Co.'s seven business units, including North American Tire operations, improved both segment operating income and segment operating margin compared to the first quarter of 2003.
Here are the first-quarter financial results for Goodyear's seven operating units, with comparative first-quarter 2003 results in parentheses:
1. North American Tire: An operating loss of $31.7 million (loss of $66.5) on sales of $1.76 billion ($1.59 billion). Tire unit sales totaled 24.7 million (24.8 million).
2. European Union Tire: Operating income of $68.9 million ($25 million) on sales of $1.11 billion ($928 million). Tire unit sales totaled 16.3 million (15.8 million).
3. Eastern Europe, Africa and Middle East Tire: Operating income of $42.6 million ($20.9 million) on sales of $283 million ($227 million). Tire unit sales totaled 4.6 million (4 million).
4. Latin American Tire: Operating income of $61.5 million ($26.6 million) on sales of $302.6 million ($231.7 million). Tire unit sales totaled 5 million (4.7 million).
5. Asia Tire: Operating income of $10.3 million ($13.2 million) on sales of $322.6 million ($140.7 million). Tire unit sales totaled 5.1 million (3.3 million).
6. Engineered Products: Operating income of $22.4 million (loss of $8.6 million) on sales of $344.6 million ($292 million).
7. Chemical Products: Operating income of $42.1 million ($31.4 million) on sales of $358 million ($299.5 million).
Higher unit volume, improved product mix, higher selling prices and cost reduction actions drove the segment operating income gain, according to the company.
Improvements in operating results were offset somewhat by an increase in raw material costs
of approximately $30 million compared to the first quarter of 2003.
Company-wide, 1Q segment operating income was up more than 400%, from $42 million in 2003 to $216.1 million this year. Goodyear's management says it believes that total segment operating income is useful because "it represents the aggregate value of income created by the company's strategic business units (SBUs) and excludes items not directly related to the SBUs for performance evaluation purposes."