For the third quarter of 2003, Goodyear tyres has reported a net loss of $105.9 million (60 cents per share), compared with net income of $32.7 million (20 cents per share) in the third quarter of 2002.
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However, the company reported record quarterly sales of $3.9 billion, up 10.7 percent from $3.5 billion during the prior-year period. Tyre unit volume in the third quarter of 2003 was 55.3 million units, up from 54.4 million units in the 2002 period.
The company estimates the effects of currency movements had a positive impact on sales of approximately $177 million in the 2003 quarter. Higher selling prices and an improved product mix also had a favourable impact on sales during the quarter.
“In addition to record quarterly sales, we are also pleased with continued strong performance in our international tire businesses as well as our Engineered Products and Chemicals units,” said Robert J. Keegan, Goodyear’s chairman and chief executive officer. “Five of our businesses have achieved year-over-year segment operating income growth. This is an indication that both our marketing investments including focus on brand and product mix and our continued drive to reduce our cost structure are paying off.
“Despite disappointing segment operating income, we continue to see positive trends in parts of our North American Tyre business, where our Goodyear and Dunlop brands gained share in the important consumer replacement market,” he said. “North American Tyre achieved its highest quarterly sales in two years, which indicates strong demand for our products among our dealer partners and consumers. We remain confident that our cost-reduction plans are on track, and these efforts are more important than ever given rising raw material costs.”
The net loss in the 2003 third quarter includes a net after-tax rationalisation charge of $46.3 million (27 cents per share) as a result of staff reductions and manufacturing consolidations in North America and Europe, and an after-tax loss of $6.3 million (4 cents per share) on the sale of assets in the United States.
Net income in the 2002 third quarter included a net after-tax rationalization charge of $8.9 million (5 cents per share), an after-tax gain of $10.7 million (6 cents per share) resulting primarily from the sale of land in Mexico and the write-off of an investment totalling $2.5 million after-tax (2 cents per share).
An increase in raw materials costs of approximately $96 million compared to the 2002 quarter had a significant negative impact on the company’s results. The net loss was also affected by foreign currency exchange loss of $10.8 million in the quarter, compared to a gain of $26 million in the year-ago quarter. These factors were partially offset by cost reduction actions and improved price and mix.
The company’s net loss for the first nine months of 2003 was $332.4 million ($1.90 per share). For the first nine months of 2002, the company recorded net income of $6.6 million (4 cents per share).
