Goodyear Tyre & Rubber has posted record first quarter sales and its highest first quarter net income in several years.
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Q1sales were US$4.9bn, a 10% increase compared with the 2007 quarter, offsetting lower volumes with higher prices, a better product mix and favourable currency rates.
Improved pricing and product mix in all four businesses drove revenue per tire up 7% over the 2007 quarter, reflecting the company’s strategy to focus on high-value-added tyres.
Lower volume primarily resulted from weak original equipment markets in North America as well as soft consumer replacement demand in North America and Europe, particularly for low-value-added tyres.
Goodyear said it made additional progress during the first quarter on its plan to achieve $1.8bn to $2bn in gross cost savings by the end of 2009. It has now achieved more than $1.2bn in savings since beginning this plan and remains on target to reach its four-year goal.
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By GlobalDataSegment operating income set a first quarter record at $367m, up 62% from $226m in the strike-affected 2007 Q1. Gross margin was 19.9% for the 2008 first quarter compared to 16.8%.
Segment operating income benefited from improved pricing and product mix of $157m, which more than offset increased raw material costs of $13m.
Favorable currency positively impacted sales by $341m and segment operating income by $27m in the quarter.
First quarter 2008 net income from continuing operations was $147m (60 cents per share) compared to a loss of $110m (61 cents per share) a year ago.
