From Tire Review staff & wire reports
AKRON, OH — The Goodyear Tire & Rubber Co. reported net income of $36.5 million (21 cents per share) for the third quarter of 2004. The tiremaker experienced growth in both sales and unit volume.
“The growth in sales reflects improved pricing and product mix; higher unit volume, primarily driven by improved sales of Goodyear-brand tires; and robust commercial tire sales,” said Goodyear in its announcement.
This report marks the tiremaker’s second consecutive quarter of record sales and positive net income, which the company attributes to improved operating results in all seven of its business segments, compared to the third quarter of 2003. Total segment operating income more than doubled compared to the 2003 period.
Goodyear’s North American Tire division’s unit volumes were stable in the third quarter of 2004, compared to the same period in 2003. Replacement volumes increased 0.9%, while shipments to OE customers were down 2.2 percent. Sales in that division increased 15.5% compared to the third quarter of 2003.
In the third quarter of 2003, the company as a whole had a net loss of $119.4 million (68 cents per share). However, Goodyear achieved record sales of $4.7 billion, compared to $3.9 billion during the 2003 period.
Subsidiaries recently consolidated increased the company’s third quarter sales by $315 million, and currency translation had a favorable impact of $105 million. A 1.6 million unit increase in tire volume resulted from the consolidation of South Pacific Tyres Ltd. (SPT), a tire manufacturer in Australia and New Zealand and T&WA, a tire-mounting operation in the U.S.
Tire unit volume in the third quarter of 2004 was 57.4 million units. In the 2003 period, unit volume was 55.3 million units.
Year to date, for the entire company, sales were a record $13.5 billion, an increase of 20.8 percent from $11.2 billion in the 2003 period. Net loss for the first nine months of 2004 was $12.3 million (7 cents per share), compared to a net loss of $372.3 million ($2.12 per share) during the 2003 period.
Goodyear also noted that it would file an amended 2003 Form 10-K including additional financial disclosures and a restatement of prior-period financial statements, including first and second quarter 2004 Form 10-Qs, to reflect after-tax expense adjustments of approximately $4.6 million.
The company also reported that it would correct a misclassification of deferred income tax assets and liabilities in its Consolidated Balance Sheet at Dec. 31, 2003, which overstated total assets and total liabilities by approximately $360 million each.
Robert Keegan, chairman and CEO of Goodyear, said he was pleased with the year-over-year improvement in the company’s results. He added, however, that management would continue to address the company’s high debt levels and unfunded pension obligations through strategies such as refinancing, potential asset sales and increased equity funding.
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