Tire-making and tire industry-related firms continue to have a rough ride in 2009, with the economy throwing plenty of chuckholes in the way.
Stockholm, Sweden-based Trelleborg A.B. reported a sharp fall in sales and earnings for the three months ended March 31, although the tire and wheel unit outperformed the firm's other divisions. Corporate operating income sank 92 percent to $5.5 million on 14.8-lower sales of $826.6 million.
Trelleborg Wheel Systems, by contrast, reported an operating earnings decline of only 6.4 percent, to $12.3 million, on 1.2-percent lower sales of $114.2 million.
Sales revenue benefitted from demand for higher value-added performance agricultural tires and positive exchange-rate effects, Trelleborg said, as tonnage sales sank 14 percent.
Trelleborg reported that its plan to cease production of industrial tires at its U.S. plant in Hartville, Ohio, during the second quarter is proceeding on schedule. This capacity will be consolidated at plants Trelleborg operates in Sri Lanka.
The year 2009 began with a continued sharp decline in demand and the prevailing sense of uncertainty regarding the demand trend during the nearest quarters is considerable, said President and CEO Peter Nilsson. Since the second quarter of 2008, we have implemented extensive capacity adjustments and we are now working aggressively to capitalize on the opportunities arising in the current market situation. We are continuously improving our market positions.
Akron's Myers Industries Inc. suffered 40-percent drops in operating and net income in the first quarter on 23.7-percent lower sales as customers pare inventories in light of the weak economy.
Looking at the rest of fiscal 2009, Myers said it is taking a conservative stance on meaningful economic and end-market improvements. This means cultivating emerging growth opportunities, strengthening competitive positions in its niche markets and aligning manufacturing and distribution structures to reduce costs.
For the quarter ended March 31, Myers reported pre-tax operating income of $8.31 million and income from continuing operations of $5.1 million, drops of 39.9 and 41 percent, respectively. Sales fell to $190.1 million.
Net income of $5.1 million was off more than 50 percent when the results of discontinued operations are included, Myers said.
Despite the continuation of challenging economic conditions, we posted solid first quarter results, Myers President and CEO John Orr said. Pricing initiatives, benefits from our restructuring and optimization programs and higher-value sales opportunities were contributing factors. While we are encouraged by these results, we remain cautious given the weak economic environment.
The company's distribution segmentwhich includes Myers Tire Supplysaw operating earnings slip 33 percent to $2.2 million on 18-percent lower sales of $36.3 million.
Myers said distribution markets remained soft from the slowdown in vehicle and tire service, due to the continued decline in miles driven and depressed auto sales.