Two 'black' quarters in a row for Goodyear
Goodyear Tire & Rubber Co. posted net income of $161 million on net sales of $4.6 billion for the third quarter ended Sept. 30, 2014. That compares to income of $166 million on sales of $5 billion for the same period last year.
Segment operating income was up 21%, from $431 million to $520 million. The company's net income-to-sales ratio was 3.4%.
"We delivered outstanding earnings growth in the quarter and achieved a segment operating income margin of more than 11%, the highest in more than a decade, despite an increasingly challenged global economy," says Richard Kramer, chairman, CEO and president.
"These results reflect our focus on capturing the value of our branded products in the marketplace and continued progress generating cost savings through our operational excellence activities."
Third-quarter sales were negatively impacted by $137 million in unfavorable foreign currency translation.
Tire unit volumes totaled 41.9 million for the third quarter of 2014, down 2% year-over-year. Original equipment unit volume was down 3%, primarily due to reduced vehicle production in Brazil. Replacement tire shipments were down 1%, primarily to a decline in North America, where markets were disrupted due to significant stockpiling of imported low-end tires in advance of potential tariffs being imposed in 2015.
"In the distorted North American industry environment, we remained committed to our strategy of pursuing profitable volume, and we achieved record segment operating income in the quarter,” says Kramer.
For the first nine months of 2014, Goodyear recorded net income of $316 million on net sales of $13.8 billion (Goodyear reported net income of $372 million in the second quarter and a loss of $58 million in first quarter). That compares to income of $372 million on sales of $14.8 billion for the first nine months of last year. Tire unit volumes were up 1%, to 122.5 million, broken down as follows: OE was down 3%, replacement was up 2%.
The company’s year-to-date segment operating income was a record $1.4 billion, up 17% from last year. Goodyear says it reflects significant earnings growth in North America and Europe, Middle East and Africa.
For a look at how Goodyear fared in North America, check out this link: