AKRON-Strong demand in the North American tire market helped many tire manufacturers and industry suppliers to post record first quarter sales. But rising raw material prices dampened margins and earnings for most companies during the period ended March 31.
Following are the latest earnings reports of publicly held tire companies.
Bandag Inc.'s net sales grew 27.7 percent during the first quarter of 1995 to $168.2 million compared with $131.7 million during the year-earlier period.
Net income rose 26.8 percent to $19.6 million from $15.4 million a year ago, the company said.
Big O Tires Inc.'s revenues rose 10.5 percent in the first quarter, aided by a 28.4-percent boost in Big O brand tire sales. Sales for the period totaled $29.2 million, up from $26.4 million.
Net income jumped 41 percent over last year's quarter to $289,000 from $205,000.
Big O said it plans to complete the conversion to its new Las Vegas distribution center during the second quarter, a move that is expected to lower selling and administrative costs beginning in the third quarter.
Continental General Tire reported its best first quarter results since Continental A.G. purchased the U.S. tire maker in 1987.
First quarter sales topped $363 million, a 16-percent increase over the 1994 period, CGT said.
``We still have considerable work to do in controlling our manufacturing costs and addressing the skyrocketing raw materials prices,'' said CGT President Bernd Frangenberg.
He attributed the first quarter sales record to increases across all market segments, including original equipment, dealer and private brand sales.
The company said passenger, light truck, medium truck and giant off-the-road tires also posted increased sales.
Despite strong first quarter sales, Cooper Tire & Rubber Co. said its net earnings were adversely affected by rising raw material costs.
Cooper's net earnings grew 2.68 percent to $27.2 million.
The company posted record first quarter net sales of $365.4 million, up 11 percent from $329.1 million in the 1994 period.
``In spite of the sound increase in our sales, earnings in the quarter were affected by the continued escalation and accumulated impact of raw material costs,'' said Cooper Chairman Patrick W. Rooney.
He added: ``The fact remains that certain raw materials costs are inordinately high.''
Mr. Rooney said he expects raw material prices to ``remain very high at least through the second quarter.''
Goodyear's first quarter sales grew 11.5 percent to an all-time quarterly record of $3.2 billion. Net income increased 14.9 percent to $133.3 million.
Tire sales jumped 10.2 percent to $2.7 billion, with increases in all geographic regions, ``showing the impact of increased selling prices, higher unit sales and currency translation,'' Goodyear said.
Tire segment operating income rose 4.6 percent to $246.7 million.
Goodyear said sales in the U.S. increased 5.9 percent to $1.8 billion. Of Goodyear's geographic segments, Europe hiked sales the most with a 31-percent increase to $672.9 million.
Hankook Tire reported 1994 sales for the year ended Dec. 31 increased 20.2 percent to $1.07 billion (844 billion won), from the 1993 year-end figure of $869 million (702 billion won). Dollar values are calculated as of the end of 1993 and 1994.
Net profit reached $27 million (21 billion won), up 10.5 percent from $24 million (19 billion won).
Tire sales accounted for 95 percent of the company's total sales in 1994, the firm said.
Myers Industries Inc. posted record sales and income for the first quarter.
Net sales grew 13.1 percent to $67.5 million from $59.7 million in the year-earlier period. Net income increased 7.7 percent to $3.77 million, up from $3.5 million in 1994.
The Akron-based company's president and CEO, Stephen Myers, said increased raw materials costs ``eroded our gross margins which moderated the growth in earnings.''
Oliver Rubber Co.'s sales rose 8 percent to $30.4 million, in the fiscal third quarter of 1995.
The increase was ``due to strong North American growth,'' according to Oliver's parent company, Standard Products Co.
Standard Products did not break out numbers for Oliver, but said ``improved operating profits. . . were more than offset by raw material cost increases.''
Standard Products' net sales increased 19 percent to $265 million in the quarter.
Net earnings fell 16.2 percent to $6.85 million.
Nine month sales rose 17.2 percent to $729.7 million, while net earnings declined 21.5 percent to $15.1 million.
TBC Corp. saw sales and income decline in the first quarter.
Net sales of $130.3 million fell 2.6 percent from $133.8 million last year. Net income hit $4.3 million, dipping 15.9 percent from the year-earlier total of $5.1 million.
``We had expected a difficult year-to-year comparison in the first quarter,'' said President and CEO Louis S. DiPasqua. ``. . . We are optimistic that results over the remainder of this year will more accurately reflect the underlying progress in TBC's basic competitive position.''
TBC said its unit shipments in the first period were down 6.5 percent from the year-earlier period.
Treadco Inc.'s sales increased 13 percent in the first quarter, but its profit margin took a hit from raw material price increases.
First quarter sales totaled $33.9 million compared with $30 million in 1994. Net income, however, dropped less than one percentage point to $901,000 compared with 1994.
The company said new tire sales increased 19.2 percent to $15.5 million, while sales from retreading grew 8.2 percent to $18.4 million.
``Treadco's profit margin has been adversely impacted by raw material price increases that we have been unsuccessful, so far, in passing along to our customers,'' said President J.J. Seiter.
Yokohama Rubber Co. Ltd. returned to the black in 1994 because of successful efforts to lower costs and streamline operations, the firm said.
The tire maker, reporting 1994 year-end totals, posted net income of $20.9 million compared with a loss in 1993 of $2.1 million. The firm's profit increased despite a 5.2-percent reduction in sales to $3.8 billion.
Outside Japan, tire demand in the U.S. and Asia increased, but the strong yen undercut the price competitiveness of exports.