Crain News Service report
AKRON — Goodyear's net income increased 17 percent on 9.5 percent lower sales for the third quarter of 2016, the company disclosed on Oct. 28.
Sales for the quarter came in at $3.8 billion compared to $4.2 billion from 2015 thanks largely to the deconsolidation of Goodyear's subsidiary in Venezuela. The firm's net income increased to $317 million, compared to $271 million in 2015. The firm cited an income tax benefit resulting from various discrete tax adjustments, partially offset by increased rationalization charges.
“We delivered solid results this quarter,” Richard Kramer, chairman, president and CEO, said in a statement.
“Our strategy is built to take advantage of the trends shaping our industry. Global demand for high-value-added, large rim-diameter tires is increasing. We are confident that our portfolio of these products and our distribution advantages position us to sustained growth and achievement of the 2020 targets that we recently announced.”
For the nine-month period, Goodyear's sales dropped 8 percent to $11.4 billion compared to 2015. In addition to the deconsolidation in Venezuela, the firm cited unfavorable foreign currency exchange rates. Net income however increased 2 percent to $703 million.
Year-to-date, tire unit volumes have increased 1 percent to 125 million thanks to growth in the Asia-Pacific region — primarily in China and Japan — following the acquisition of a controlling interest in Nippon Goodyear Ltd. Replacement shipments are up 2 percent and original equipment unit volume decreased 3 percent overall; but when excluding the impact of the deconsolidation of Venezuela OE, volumes increased 2 percent.