AKRON, OH — Goodyear Tire & Rubber Co. posted record sales of $19.6 billion for 2007, it reported this morning, up 5 percent vs. 2006, and net income for the year came in at $602 million, up from 2006’s loss of $330 million.
Company officials credited cost-cutting efforts, as well as pricing and mix improvements of some $639 million, which offset 3.5 percent ($195 million) higher raw material costs compared to 2006.
North American Tire sales hit $8.86 billion, down from 2006’s $9.09 billion, with unit sales falling to 81.3 million tires in 2007 from 90.9 million tires in strike-impacted 2006. Some of the unit decrease was attributed to the impact of the United Steelworkers strike that ended in early 2007.
Even with reduced unit and dollar sales, the North American Tire group posted operating income of $139 million for 2007, up from 2006’s strike-impacted loss of $233 million.
Goodyear’s fourth quarter 2007 sales were $5.2 billion, up 11 percent year-over-year. The company estimates that a 12-week strike at its North American facilities in 2006 reduced fourth quarter 2006 sales by $318 million.
“Our fourth quarter results show significant gains as we drive sales of our higher-margin premium p rod uct lines,” said Robert Keegan, chairman and chief executive officer. “This is especially true in our emerging markets businesses in Eastern Europe , Asia and Latin America . In aggregate, these three businesses grew sales 20 percent and segment operating income 41 percent in the quarter.”
“Excluding the impact of the strike, North American Tire’s focus on innovative new p rod ucts helped it achieve its highest full-year segment operating income since 2000,” said Bob Keegan, chairman and CEO.
“We have now achieved more than $1 billion in savings in 2006 and 2007 and clearly remain on target to reach our four-year goal,” Keegan said. “During 2007, we also made substantial progress on improving our balance sheet with net debt decreasing more than $2 billion. We remain on track to achieve our next stage financial metrics, which include an 8 percent segment operating income return on sales globally, a 5 percent segment operating income return on sales in North America and a target of 2.5 times debt-to-EBITDA.” (Courtesy of Tire Review)
