AKRON, Ohio -- Goodyear Tire & Rubber Co. has reported improved third quarter earnings in 2009. The company's third quarter 2009 sales were $4.4 billion, down 15 percent from 2008's third quarter. Sales were up 11 percent from 2009's second quarter.

Third quarter 2009 sales reflect the $276 million impact of a 7 percent decline in tire unit volume due to lower industry demand as well as a $279 million reduction in sales in other tire-related businesses, primarily third-party chemical sales by North American Tire. Unfavorable foreign currency translation further reduced sales by $159 million.

Goodyear successfully launched 15 new products in the quarter, in addition to the 42 launched in the first half. The company has exceeded its goal of more than 50 new product launches during 2009.

The company had segment operating income of $275 million in the third quarter of 2009, up from $266 million in the 2008 third quarter and $24 million in 2009's second quarter.

Compared to the prior year, third quarter 2009 segment operating income reflects continued weak industry demand, which resulted in a negative volume impact of $64 million and under-absorbed fixed costs of approximately $107 million. The 2009 quarter benefited from $207 million in lower raw material costs.
Goodyear made additional progress during the third quarter on its Four-Point Cost Savings Plan. The company achieved $195 million in new savings during the third quarter, for a total of $540 million in the first nine months of 2009.

During the third quarter of 2009, the company reduced its global work force by 300 positions, adding to approximately 5,500 first half reductions. The company's full-year target was a reduction of 5,000 positions.

Third quarter 2009 Goodyear net income was $72 million (30 cents per share), up from $31 million (13 cents per share) in 2008's third quarter. The company had net losses of $221 million (92 cents per share) in the second quarter of 2009 and $333 million ($1.38 per share) in the 2009 first quarter. All per share amounts are diluted.

The 2009 third quarter was impacted by charges of $29 million (12 cents per share) due to rationalizations, asset write-offs and accelerated depreciation; a non-cash loss of $18 million (8 cents per share) on the liquidation of a subsidiary in Guatemala; a charge of $9 million (4 cents per share) to correct first-half earnings attributable to minority shareholders; expenses of $5 million (2 cents per share) related to the company's new USW labor contract; net tax-related benefits of $22 million (8 cents per share), and a gain on asset sales of $6 million (3 cents per share). All amounts are after taxes and minority interest.

Positive cash flow and reduced working capital requirements have combined to improve Goodyear's cash and liquidity position. As part of its supply chain initiative, inventory levels are more than $1 billion below the year-end 2008 level.

"The strength of our brands and steady stream of new and innovative tires such as our branded fuel-efficient tires provided marketplace momentum and led a strong third quarter performance," said Robert Keegan, chairman and chief executive officer.

"The success of our Top Line, Cost and Cash actions together with improving market conditions and lower raw material costs drove improved third quarter earnings compared to both last year and to the second quarter," he said.

"We are pleased that our results for the quarter were in line with our original operating plan despite more difficult conditions than we had expected at the beginning of the year," Keegan added.

Goodyear said it anticipates year-over-year global industry growth in 2010, especially in markets for tires featuring high-value-added features, larger rim diameters and fuel-efficient technology. The company's industry-leading new product engine, advantaged supply chain and reduced cost structure position it well to capitalize on these market opportunities.

Additionally, the company's strength in high-growth markets of the world in Asia, Latin America and Eastern Europe will allow it to leverage its advantages in these markets and capture a significant portion of that growth potential.