AKRON, Ohio – The Goodyear Tire & Rubber Co. reported higher sales and earnings for both the fourth quarter of 2011 and the full year compared to the prior year.
"I am very pleased with our record sales and segment operating income performance in 2011 as we successfully managed a challenging economic environment," said Richard Kramer, chairman and CEO. "With full-year segment operating income of nearly $1.4 billion worldwide and $276 million in North American Tire, its best performance since 2000, we made strong progress toward our 2013 targets.
"Despite lower fourth quarter unit volume, all four of our tire businesses achieved record fourth quarter and full-year sales as we improved price/mix and gained branded share in our targeted market segments," Kramer said. "We feel good about the progress we have made in improving our business model and remain confident in our long-term strategy."
Goodyear’s fourth quarter 2011 sales were $5.7 billion, up 12 percent from a year ago. The company said fourth quarter sales reflect strong price/mix performance, which drove revenue per tire up 19 percent year-over-year, excluding the impact of foreign currency translation. Unfavorable unit volume and foreign currency translation reduced sales by $174 million and $49 million, respectively.
The company achieved segment operating income of $196 million in the fourth quarter of 2011, down $28 million from the 2010 period. Segment operating income for the fourth quarter of 2011 reflected improved price/mix of $702 million, which more than offset $631 million in higher raw material costs ($583 million net of raw material cost reduction actions).
Segment operating income was negatively impacted by $37 million in lower volume and $19 million due to lower profits from other tire-related businesses, primarily third-party chemical sales in North America, Goodyear said. Costs resulting from business disruptions and the temporary closure of the company’s factory in Thailand due to flooding in that country also negatively impacted segment operating income. Cost inflation along with higher North American Tire profit sharing, inefficiencies related to a plant closing in North America and poor productivity at factories in France more than offset the benefit of cost saving programs.
Goodyear’s fourth quarter 2011 net income available to common shareholders was $18 million (7 cents per share). The company recorded a net loss of $177 million (73 cents per share) in the 2010 fourth quarter. All per share amounts are diluted.
Goodyear’s 2011 annual sales were a record $22.8 billion, up 21 percent from $18.8 billion in 2010. Sales reflect strong price/mix performance, which drove revenue per tire up 17 percent over 2010, excluding the impact of foreign currency translation. Goodyear said sales were also positively impacted by an $875 million increase in sales in other tire-related businesses, primarily third-party chemical sales in North America. Tire unit volumes were essentially flat compared with 2010. Favorable foreign currency translation increased sales by $599 million. The sale of the Latin American farm tire business negatively impacted sales by $67 million.
The company achieved record full-year segment operating income of nearly $1.4 billion in 2011, which was up 49 percent from $917 million in 2010. Segment operating income reflects record sales in all four of the company’s business units. Compared to the prior year, 2011 segment operating income also benefitted from $2.4 billion in improved price/mix, which more than offset$1.8 billion in higher raw material costs. Raw material costs reflect $177 million in actions taken to reduce their impact. The sale of the Latin American farm tire business in April 2011 negatively impacted segment operating income by $25 million.
Goodyear’s 2011 net income available to common shareholders of $321 million ($1.26 per share) compares to a net loss of$216 million (89 cents per share) in 2010. All per share amounts are diluted.
Goodyear expects long-term growth in the global tire industry to continue, but at a slower pace near-term than previously forecast due to continued economic weakness in multiple markets. The company expects that its full-year tire unit volume for 2012 will be essentially flat with 2011.
