Continued weak global industry demand and high raw material costs have impacted on Goodyear’s first quarter results, with the company registering first quarter sales of $3.5 billion on 20% lower tyre volumes.
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“Our markets presented us with the challenges we expected in the first quarter, and in some cases more,” said Robert J. Keegan, chairman and chief executive officer. “While we aren’t satisfied with our results, they generally reflect the difficult market conditions. Our ongoing innovation played a significant role in driving our first quarter top line as we continued to take the right cost and cash actions to weather the economic downturn and position our company to rapidly take advantage of opportunities as the markets recover.”
The sales of US$3.5 billion were down from record sales of $4.9 billion in the 2008 quarter.
Goodyear’s first quarter 2009 net loss was $333m ($1.38 per share), compared with net income of $147m (60 cents per share) in the 2008 quarter.
The company said that the quarter’s sales reflect the $766m impact of a 20% decline in tyre unit volume due to significantly lower global industry demand.
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By GlobalDataIn addition, unfavourable currency translation reduced sales by $484m.
However, sales benefited from price/mix improvements that drove revenue per tyre, excluding the impact of foreign currency translation, up 3.4% over the 2008 quarter despite a significant drop in commercial truck tyre unit volume.
The company’s North American unit declined from last year, reflecting significantly reduced industry demand, Goodyear said. Original equipment unit volume declined 49%, resulting from lower vehicle production. Replacement tyre shipments were down 10%.
First quarter sales benefited from improved price/mix as well as market share gains for Goodyear-brand tyres in the consumer and commercial replacement markets.
Europe, Middle East and Africa Tyre’s first quarter sales declined from last year primarily due to lower tyre unit volume, reflecting significantly reduced industry demand and foreign currency translation, the company said. Original equipment unit volume declined 47%, resulting from lower vehicle production in Europe. Replacement tyre shipments were down 9%.
Latin American tyre’s first quarter sales declined from last year primarily due to lower tyre unit volume, reflecting reduced industry demand and unfavourable foreign currency translation. Original equipment unit volume declined 16%, resulting from lower vehicle production. Replacement tyre shipments were down 20%.
