AKRON (May 5, 2005)—Driven by stronger operating income in all of its tire business segments, Goodyear reported first quarter net earnings of $68 million, its fourth consecutive profitable quarter, and a dramatic improvement from its first-quarter net loss of $78 million last year.©
Goodyear posted 11.6-percent higher sales compared with 2004's first quarter to $4.8 billion, a first-quarter record. The Akron tire maker attributed the sales increase to higher pricing, a more favorable product mix and favorable currency translation of of approximately $126 million.
“By continuing to focus our resources on driving improvements in targeted markets, we see the benefits in both increasing competitiveness and earnings,” said Chairman and CEO Robert J. Keegan. He said the North American, Latin American, European Union and Asia/Pacific tire businesses all drove the earnings improvement despite rapidly rising raw material costs.
North American Tire also achieved its fourth consecutive quarter of positive operating income to $11 million compared with a first-quarter operating loss of $24 million last year. Sales jumped 10.3 percent to $2.14 billion, thanks to volume increases, favorable pricing and product mix and cost reduction activities. Goodyear noted that North American Tire's raw material costs increased approximately $64 million during the quarter.
Total segment operating income grew to $292 million, a 61.3-percent increase from the 2004 period.
Goodyear's results include net after-tax gains of $7 million from reversals of rationalization charges and net after-tax charges of $12 million related to general and product liability-discontinued products.
Tire unit volume in the first quarter jumped 200,000 units from the year-ago period to 55.9 million units. Goodyear said unit volume change was impacted by a 7.9-percent increase in the North American replacement market and offset by lower original equipment volumes of 8.7 percent in North America and Europe. North American Tire's commercial tire business saw a 14.9-percent rise in volume.