AKRON (Oct. 27, 2005) — Goodyear continued its financial recovery in the third quarter, reporting its highest net income for the period since 1998 from record net sales and strong operating results in the tire business.
Third quarter net income rose to $142 million for the period ended Sept. 30, compared with $38 million a year ago, the firm said. Sales grew 7 percent to $5.03 billion.
For the nine months, Goodyear had net profits of $279 million on sales of $14.8 billion, compared with a loss of $10 million on sales of $13.5 billion in the 2004 period.
The company said all its tire business segments achieved higher operating income from the corresponding period in 2004. The results were attributed to focusing on high margin segments and introducing higher-margin products quickly. Total segment operating income rose 21.3 percent to $330 million.
Goodyear said its tire unit volume in the quarter rose 1.7 percent to 58.4 million units from 57.4 million units.
Operating profits in the quarter more than doubled for the North American Tire business unit, to $58 million, as sales grew 5 percent to $2.37 billion. Unit sales were flat at 26.6 million.
“This improvement, including a second consecutive $5 billion sales quarter, is further evidence that we are executing to our plan,” said Chairman and CEO Robert Keegan.
Goodyear's Engineered Products unit, which is on the selling block, had a 20.6-percent falloff in operating income, to $27 million, although sales climbed 7.4 percent to $407 million. The company said higher manufacturing and raw material costs, and increased expenses from bad debt and freight costs cut into income.
The quarterly results for the other tire units are:
* European Union Tire—operating income increased 17.6 percent to $80 million, sales up 4.2 percent to $1.13 billion;
* Eastern Europe, Middle East and Africa Tire—operating income rose 6.6 percent to $64 million, sales 14.5 percent to $394 million;
* Latin American Tire—a 20.3-percent increase in operating income to $77 million, sales up 17.7 percent to $372 million; and
* Asia/Pacific Tire—operating income rose 16.3 percent to $24 million, sales 11.6 percent to $356 million.