Tyre maker Goodyear said third quarter 2012 sales were down 13% to $5.3bn as a result of tyre sales down $592m and $258m in foreign currency costs. Tyre unit volume slipped 12% to 41.8m due mainly to weaker sales in Europe.
Price/mix improvements however boosted per-tyre revenue up 5% but that was offset by currency costs.
Operating income of $348m was down $115m year on year and due to a $114m hit from lower tyre volume and associated unabsorbed overhead costs of $89m, offset partially by improved price/mix of $159m, which offset $47m in raw material cost increases (before the benefit of cost savings actions).
Third quarter net profit was down to $161m ($0.60 per share) to $110m ($0.41).
“We achieved solid segment operating income in the third quarter, driven by our performance in North America,” said chairman and CEO Richard Kramer.
“While we were impacted by the macroeconomic challenges we face in Europe, we continue to see the benefits of our actions to sustain profit margins in a weak volume environment.”
Kramer said that with the company’s third quarter performance, it has essentially achieved its target of $1bn in cost savings ahead of plan.
Goodyear added it would take additional cost reduction actions because of ongoing economic uncertainty but expects to exceed its three-year cost savings goal.
“The structural improvements we made in our North American business are producing results that now put it on track to not only meet, but exceed, its 2013 operating income target a year early,” Kramer added.
“Our 2012 results demonstrate strong progress toward delivering profit throughout the economic cycle and generating sustainable value for shareholders,” he said.
“We continue to target $1.6bn of segment operating income and positive cash flow in 2013.”
The supplier expects fourth quarter 2012 tyre unit volume 3% to 5% below Q4 2011.