Goodyear reports record sales, $11 million income loss

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Monday, April 30, 2012
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- f' m0 E; H) s% p5 sAkron, OH - Goodyear Tire & Rubber reported record sales for the first quarter of 2012. “I’m pleased with our results as our businesses posted solid operating income,” said Richard J. Kramer, chairman and chief executive officer. Goodyear’s first quarter 2012 sales were $5.5 billion, up 2 percent from the 2011 quarter and a first quarter record. Tire unit volumes totaled 43 million, down 8 percent from 2011, reflecting weak industry demand in many markets. This compares to first quarter 2011 volumes that were up almost 7 percent from 2010. First quarter sales reflect strong price/mix performance, which drove revenue per tire up 16 percent year-over-year, excluding the impact of foreign currency translation. Unfavorable unit volume and foreign currency translation reduced sales by $345 million and $108 million, respectively. The company had segment operating income of $292 million in the first quarter of 2012, down $35 million from the year-ago quarter. Segment operating income reflected an improved price/mix of $525 million, which more than offset $482 million in higher raw material costs ($420 million net of raw material cost reduction actions). Segment operating income was negatively impacted by $54 million in lower volume and higher under-absorbed fixed costs of approximately $6 million. Cost inflation along with inefficiencies related to a plant closing in North America and poor productivity at factories in France more than offset the benefit of cost saving programs. Goodyear’s first quarter 2012 net loss available to common shareholders was $11 million (5 cents per share), compared with net income of $103 million (42 cents per share) in the 2011 quarter. All per share amounts are diluted. The 2012 first quarter included $86 million (35 cents per share) in charges resulting from the early redemption of senior notes; $14 million (6 cents per share) in rationalizations, asset write-offs and accelerated depreciation; $3 million (1 cent per share) in discrete tax charges; and gains of $5 million (2 cents per share) from the net impact of insurance recoveries related to the Thailand flood and $3 million (1 cent per share) from asset sales.