North America leads the way for Goodyear in 2004
A strong financial performance by Goodyear Tire & Rubber Co.'s North American Tire business unit helped the company record positive net income in 2004.
In North America, Goodyear posted the following results (with 2003's results in parentheses):
Tire units: 102.5 million (101.2 million).
Sales: $7.854 billion ($6.745 billion).
Operating income/loss: $31.5 million ($130.9 million loss).
In the European Union Tire segment, tire units were up less than 1% versus the previous year. However, sales were up 14.1%, and operating income was up 94.7%.
In the Asia/Pacific Tire segment, tire units were up 45.5%, from 13.4 million in 2003 to 19.5 million last year. Sales were up 125.5%, while operating income increased 22.4%.
(Asia/Pacific Tire sales more than doubled due to the consolidation of South Pacific Tyres in accordance with FIN 46.)
For the year, operating income for all the segments more than doubled, to $1.1 billion from $511 million in 2003.
"This was an important year for our company, and we are pleased with the significant improvements our associates have made," says Chairman, CEO and President Bob Keegan.
"In 2003, our goal was stabilizing our North American Tire business. In 2004, we were focused on building the momentum in all seven business units. In 2005, we are positioned to accelerate our operating progress.
"We will face challenges including original equipment cutbacks in North America, a softer Chinese original equipment consumer market, tight commercial truck supply and higher raw material costs, but we have positive momentum in our markets."
North American Tire's sales reached a fourth-quarter record, and were up 21% compared to 4Q 2003. Fourth-quarter segment operating income was $16 million, compared to a loss of $15 million during the same period the previous year.
Increased volume, primarily in the consumer replacement and commercial OE markets, also contributed to positive operating income in North America during the fourth quarter, while higher raw material costs had a negative impact of about $40 million.
Operating income from all the company's business units increased 56%, to $271 million, in the fourth quarter. That compares to $174 million in 4Q 2003.