Goodyear Tire & Rubber Co.’s second-quarter net income nearly doubled, and its North American unit generated record operating profit.
The profit growth came despite overall sales that declined about 8 percent to roughly $5.2 billion from $5.6 billion a year ago.
The Akron tire maker’s adjusted second-quarter profits, reported by the company Tuesday, beat Wall Street forecasts.
Goodyear CEO Richard Kramer said in comments to analysts that the second-quarter results “give us confidence that we have the right strategies in place and we are successfully building our business to better withstand the fluctuations of the tire industry, the marketplace and the global economy.”
The company, which employs 3,000 workers in Akron, reported net income of $92 million, or 33 cents per share, for the three months ending June 30. That was up from $47 million, or 16 cents a year earlier.
Excluding one-time items, Goodyear earned 57 cents per share. Analysts expected just 45 cents per share.
On the downside, company revenue fell 8.4 percent to $5.15 billion from $5.6 billion a year ago as demand in Europe declined amid the region’s ongoing economic woes. Analysts expected $5.74 billion.
Kramer told analysts that other challenges included the effect of weaker currencies against the U.S. dollar.
Goodyear on April 27 had forecast a roughly 2 percent decline in overall tire unit volume for 2012, as compared with 2011. The company expects its 2012 tire sales volumes to be down about 5 percent to 7 percent from 2011 levels because of “continued economic challenges, particularly in Europe.”
Goodyear’s largest business segment, North American Tire, saw income of $188 million for the second quarter, rising a record 37 percent from the prior year.
North American Tire’s second-quarter 2012 sales increased 2 percent from last year to $2.5 billion, a second-quarter record. The company said the sales increase reflects improved “price/mix”— increased tire prices and sale of more tire brands that earn the company a higher profit margin. Tire sales fell to 15.4 million units from 15.7 units in the second-quarter of 2011.
Europe, Middle East and Africa Tire’s second-quarter income of $19 million was $107 million below the prior year. Revenues decreased to $1.6 billion, down 18 percent from the 2011 second quarter. Tire sales fell to 14.2 million units from 17 million units last year.
Latin American Tire’s income of $58 million for the second quarter was up $4 million from a year ago. Asia Pacific Tire’s income for the second quarter was $71 million, up 9 percent from last year’s period. Goodyear’s shares gained $1.08 — or 10.41 percent Tuesday — closing at $11.45.
Beacon Journal wire services contributed to this report. Katie Byard can be reached at 330-996-3781 or kbyard@thebeaconjournal.com.
