USA: Goodyear writes this year's third quarter net income figure in black ink
The Goodyear Tyre & Rubber Company has reported its second consecutive quarter of record sales and positive net income, driven by improved operating results in all seven of its business segments compared to the third quarter of 2003.
Goodyear reported net income of $US36.5 million (21 cents per share) for the third quarter of 2004, reflecting growth in both sales and unit volume. In the third quarter of 2003, the company had a net loss of $119.4 million (68 cents per share).
The company achieved sales of $4.7 billion, a record for any quarter and a 20.7% increase from $3.9 billion during the 2003 period.
Goodyear said the growth in sales reflected improved pricing and product mix; higher unit volume, primarily driven by improved sales of Goodyear-brand tyres; and "robust" commercial tyre sales in virtually all of the company's markets.
Tyre unit volume in the third quarter of 2004 was 57.4 million units, compared to 55.3 million units in the 2003 period.
All seven of Goodyear's business units reported higher segment operating income compared to the year-ago period. Total segment operating income more than doubled compared to the 2003 third quarter.
"We are pleased with the year-over-year improvement in our results as well as the momentum we are building on the strength of our new products and the Goodyear brand," said chairman and CEO Robert Keegan said in a statement.
"As a result of our new Goodyear-brand products and the continued strength of our high performance and truck tyre products, we gained share in the consumer replacement and the commercial OE and replacement markets in North America during the third quarter," he added.
In addition to the sales impact, the third quarter of 2004 includes a 1.6 million unit increase in tyre volume and a minimal effect on net income resulting from the consolidation of South Pacific Tyres Ltd. (SPT), a tyre manufacturer in Australia and New Zealand, and T&WA, a tyre-mounting operation in the United States.
Goodyear's third quarter results included net after-tax charges of $32.3 million (18 cents per share) for rationalisations and accelerated depreciation, principally in the company's non-tyre businesses, and $7.9 million (5 cents per share) related to the ongoing accounting investigation and external professional fees associated with Sarbanes-Oxley compliance. The quarter also included a favourable $43.6 million (25 cents per share) tax adjustment related to the settlement of prior-year tax liabilities.
Though pleased with the company's third quarter results, Keegan said that management remains focused on addressing the company's current high debt levels and unfunded pension obligations with specific strategies including refinancing to lengthen debt maturities, potential asset sales to reduce obligations and, ultimately, seeking increased equity funding to improve Goodyear's credit profile.