Goodyear 2Q: Higher income and record earnings
Goodyear Tire & Rubber Co. posted net income of $213 million on net sales of $4.7 billion for the second quarter ended June 30, 2014. That compares to income of $181 million on sales of nearly $4.9 billion for the same period last year.
Segment operating income was up 7%, from $428 million to $460 million, a second-quarter record. The company’s income to sales ratio was 4.5%.
Goodyear said the increase in segment operating income was driven by significant improvement in Europe, Middle East and Africa, which offset softness in emerging markets.
Tire unit volumes totaled 40.6 million for the second quarter of 2014, up 3% from 2013. Replacement tire shipments were up 6%. Original equipment unit volume was down 4%, primarily in Latin America
The company reported North America second-quarter earnings of $208 million, a record for any quarter. Goodyear said its North American business continued to perform at record levels with segment operating margin of more than 10%.
“We delivered record second quarter results, driven by strong consumer replacement volumes in all of our regions where our new products are in demand,” says Richard Kramer, chairman and chief executive officer.
“Our performance in the first half, which was achieved through a balance of volume growth and cost reduction, gives us confidence that our strategy is working and we are on track to attain our 2014-2016 financial targets.”
North America segment, 2Q 2014
Tire unit sales: 15.3 million (up 3.4%)
Sales: $2.0 billion (down 7%)
Operating income: $208 million (up 2%)
Replacement tire shipments were up 6%. Original equipment unit volume was down 4%. Sales reflect a 3% increase in tire unit volume, offset by lower third-party chemical sales and lower price/mix, according to Goodyear.
Through the first six months, Goodyear recorded net income of $155 million (down 24.7%) on net sales of $9.1 billion (down 6%). The company said Europe, Middle East and Africa second quarter earnings more than doubled to $117 million. Second-quarter tire volumes increase 3%, in line with the full-year outlook. Goodyear reaffirmed its 2014-2016 financial targets.