AKRON (June 21, 2004) — Goodyear is showing signs of progress in its turnaround efforts, but challenges remain in the goal to return its North American Tire (NAT) unit to profitability, Goodyear executives said during a first quarter conference call.
“We are now getting traction in our North American Tire turnaround plan,” said Chairman and CEO Robert Keegan. “We are beginning to execute well in North American Tire.” He added that main challenges include high debt and unfunded pension obligations.
Last week Goodyear reported a net loss of $76.9 million in its first quarter, a 60.9-percent improvement from the $196.5 million loss in 2003's first quarter. The Akron-based tire maker also reported record sales of $4.29 billion, up 20.8 percent from last year's $3.55 billion. Tire unit volume was 55.7 million units, up from 52.6 million units a year ago. Total segment operating income was up to $216.1 million from $42.0 million in 2003.
Segment operating income was up in six of seven business units. “I am extremely pleased that one of those six businesses was North American Tire,” Mr. Keegan said.
But NAT still is the only business segment in the red. Though the segment's operating loss improved to a loss of $31.7 million from a deficit of $66.5 million in 2003, the other six businesses are in the black in 2004's first quarter.
NAT 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 in the unit was slightly down to 24.7 million units from 24.8 million units.
Mr. Keegan said revenue from the tire maker's new Assurance line should start appearing in the second quarter results, since the tires were only shipped toward the end of the first quarter.