Goodyear posted net income of $28 million in the second quarter, rebounding from a loss of $221 million a year ago.
Sales for the quarter ended June 30 jumped 14.8 percent to $4.5 billion buoyed by a 10-percent increase in tire unit volume resulting from improved global demand. The company said the quarter also was impacted by $161 million in higher sales from other tire-related businesses, primarily third-party chemical sales in North America, and by improved price/mix.
Unfavorable foreign currency translation reduced sales by $37 million.
“We are very pleased with our strong performance in the second quarter and first half of the year,” said President and CEO Richard Kramer. “Our businesses continue to perform better than a year ago as they capture the benefits of recovering industry demand, strong new product performance and solid productivity improvements. We are clearly on the right path as our strategies position us to grow profitably as markets continue to improve.”
Mr. Kramer noted that improved results in the company's North American Tire business unit made a significant contribution to Goodyear's second quarter success.
“These results are further evidence of the effectiveness of our strategy to drive innovation, improved mix and operational efficiency in the business,” he said.
The company had segment operating income of $219 million in the second quarter, up from $24 million from a year ago, reflecting higher global demand, strong price/mix performance and cost reduction actions.
Improved price/mix of $121 million during the quarter more than offset $54 million in net higher raw material costs, the company said.
“Raw material costs remain a challenge and we continue to see an uncertain economy, but we remain focused on the proven strategies that have enabled us to address these headwinds over time,” Mr. Kramer said.
In its North American Tire business unit, Goodyear said sales surged 21 percent to $2 billion, reflecting a 13-percent increase in tire unit volume to 16.16 million units. Operating income jumped to $16 million following a loss of $91 million in the year-ago period.
The North American unit also saw an improved price/mix, branded share gains in the replacement consumer tire segment and a 69-percent increase in original equipment unit volume.
Goodyear benefited from increased production levels, decreased pension expense and actions to reduce costs during the quarter, although general and product liability expenses increased.
For the six months, Goodyear saw its net loss shrink to $19 million compared with a net loss of $554 million in 2009, as sales rose 17.6-percent to $8.8 billion.
A 12-percent increase in tire unit volume contributed $703 million in additional sales, the firm said. Goodyear also saw a $286 million increase in sales in other tire-related businesses. Favorable currency translation further aided sales by $187 million.