AKRON (Nov. 3, 2008) — Goodyear recorded record third quarter sales but its net income from continuing operations in the period tumbled to $31 million from $159 million in 2007.
The Akron-based tire maker's third quarter revenues of $5.2 billion increased 2 percent from last year. The company cited as the chief reasons for the increase improved pricing, a richer product mix and strength in international markets—which offset lower volume, especially in North America and Europe.
In addition, Goodyear said sales were impacted by the 2007 divestiture of the company's tire mounting business, which contributed sales of $145 million in last year's third quarter.
Goodyear actually had net income of $668 million in the 2007 third quarter from all operations, but that included a gain of $517 million on the sale of its former Engineered Products business.
The 2008 quarter was impacted by net rationalization charges and accelerated depreciation of $46 million; a loss on settlement of post-retirement health care obligations in connection with the establishment of a Voluntary Employees' Beneficiary Association (VEBA) of $13 million; expenses related to hurricanes Gustav and Ike of $7 million; discrete net tax charges related primarily to German operations of $6 million; charges related to the exit of its Moroccan business of $5 million; and a gain on asset sales of $2 million, the company said.
Revenue per tire, excluding the impact of foreign currency translation, increased 8 percent over the 2007 quarter, which the company said reflected global gains in pricing and product mix generated by its strategy to focus on high-value-added tires.
“Goodyear's solid third quarter concludes a strong nine months of performance, reflecting the successful execution of our business strategies and continued strength in our international businesses,” Chairman and CEO Robert J. Keegan said in a prepared statement.
Goodyear said it made significant progress during the period on its four- point plan to cut more than $2 billion from the tire maker's operations by 2009. Mr. Keegan said the firm has trimmed about $1.6 billion thus far and is on a path to surpass the $2 billion figure.