AKRON (July 23, 2002) — Goodyear reported record net income of $28.9 million for the second quarter as cost reduction programs and rationalization activities started paying dividends, according to Samir G. Gibara, chairman and CEO. The company also benefited from lower raw material costs.
The record earnings only partially offset the firm's loss in the first quarter, leaving the six months net loss at $34.3 million.
Worldwide sales fell 2.9 percent to $3.48 billion in the quarter and 3 percent to $6.79 billion for the six months.
The North American tire unit saw sales fall 7.1 percent in the quarter to $1.7 billion as unit sales to the replacement market dropped 15.8 percent. Goodyear blamed the drop in large part on a number of its larger distributors postponing purchases. Original equipment shipments were up 6.8 percent.
Operating income for the North American tire unit of $39.3 million came up 20.3-percent shy of the 2001 second quarter performance, due to the lower replacement market sales, a negative change in the replacement market brand mix and the higher share of lower-margin OE tires, the conclusion of the Ford Motor Co. tire replacement program and lower factory utilization.
For the six months, Goodyear North America Tire was $12 million in the red (operating basis) as sales fell 3 percent to $3.35 billion. Replacement market shipments were off 9.5 percent.
Goodyear's six other operating divisions – European Union Tire, Eastern Europe Tire, Latin American Tire, Asia Tire, Engineered Products and Chemical Products – all reported improved operating earnings for the quarter.