Goodyear has announced third quarter net income of just US$31m against a figure of US$668m in 2007. But it’s not as bad as it looks. Last year’s third quarter was distorted by the US$517m proceeds of a divestiture; the comparable figure last year is US$159m (an 80% drop).

The tyres giant also pointed to revenues up slightly to US$5.2bn versus US$5.1bn in the third quarter last year. The company cited improved pricing and product mix in international markets as positives that helped offset lower volume in North America and Europe.

“Goodyear’s solid third quarter concludes a strong nine months of performance, reflecting the successful execution of our business strategies and continued strength in our international businesses,” said Robert J. Keegan, chairman and chief executive officer.

“The tyre industry is facing challenging business conditions as the global financial crisis and slowing economic conditions are impacting consumer demand in all regions. Our results reflect the economic reality of weakened industry demand and the associated cost impact of production cuts we initiated during the quarter,” he added.

“Our leadership team has the experience to operate effectively under these conditions and is taking decisive actions necessary to lessen the impact of falling industry demand. In this environment, you can expect Goodyear associates to drive business innovation, aggressively target costs and advance our business strategies,” Keegan said.

Third quarter income from continuing operations was US$31m (13 cents per share), which the company says compares to US$159m (67 cents per share) last year.

Goodyear said it has made significant progress during the third quarter on its four- point plan to achieve more than US$2bn in cost savings from 2006 through 2009.

“We have now achieved US$1.6bn in savings and are clearly on a path to significantly surpass US$2bn,” Keegan said.

Goodyear’s sales for the first nine months of 2008 were a record US$15.4bn, a 6% increase over 2007 despite a 5% decline in tyre unit volume.

Income from continuing operations for the first nine months of 2008 was US$253m  (US$1.04 per share). This compares to US$78m (39 cents per share) last year.

Goodyear said that improved pricing and product mix of US$682m in the first nine months of 2008 more than offset increased raw material costs of US$361m.

“Our performance under challenging conditions this year demonstrates the capabilities of the business model we have put in place and the operating leverage we expect to harness once industry conditions improve,” said Keegan.