AKRON (June 18, 2004) — Goodyear reported a net loss of $76.9 million in the first quarter—a 60.9-percent improvement from the $196.5 million loss in 2003's first quarter—plus record sales of $4.29 billion and improvements in segment operating income.
Sales in the quarter were up 20.8 percent from last year's $3.55 billion, primarily on stronger volume, higher pricing, favorable product mix and $200 million from positive currency translation. Goodyear said its tire unit volume in the quarter was 55.7 million units, up from 52.6 million units in 2003. Total segment operating income also was up to $216.1 million from $42.0 million in 2003's first quarter.
The Akron-based tire maker said improvements in operating results were somewhat offset by an increase of about $30 million in raw material costs compared with 2003's first quarter. The current quarter also included various rationalization charges.
Goodyear will host a conference call with investors concerning these results at 11 a.m. June 21. Goodyear had originally planned to release the results June 16 with a conference call that day but said it needed more time. The results instead were released June 18.
Six business units—including North American Tire—saw improvements in segment operating results though NAT still remains in the red. NAT's segment operating loss in the quarter was $31.7 million, improved from a loss of $66.5 million in 2003. Goodyear's largest unit also grew sales 10.8 percent to $1.76 billion from $1.59 billion last year, largely due to favorable pricing and product mix. Tire unit volume was slightly down to 24.7 million units from 24.8 million units.
In NAT, Goodyear said its original equipment shipments increased less than 1 percent while replacement volume fell less than one percent. Goodyear said market share was down in the private label business.
“Our operating results have improved dramatically as a result of strong volume, improved pricing and a richer product mix, as well as our cost reduction efforts and the strategies we are implementing to improve our business economics,” said Robert Keegan, chairman and CEO. “While challenges remain, we are pleased with the continuing success of our turnaround strategies and with our progress to date.”
Mr. Keegan said those challenges include high levels of debt and unfunded pension obligations. Goodyear will work on these by refinancing to lengthen debt maturities, exploring potential asset sales to reduce obligations and seeking increased equity funding to improve Goodyear's credit profile.