AKRON, OH — Posting record quarterly sales and an increase in tire unit volume sales, Goodyear Tire & Rubber Co. finished the second quarter of 2004 on an upswing, earning its first quarterly net profit in a few years. And its struggling North American Tire division posted its first quarterly profit in eight consecutive quarters.
Goodyear reported net income of $25.1 million for the quarter on record sales of $4.5 billion. Each of its seven operating units also rang up profits for the period. In 2003’s second quarter, Goodyear posted a net loss of $53.0 million.
Sales for the first six months of 2004 were a record $8.8 billion, up 20.6 percent from $7.3 billion in the 2003 period, and tire unit volume was 110.7 million units, up from 105.4 million units a year ago. While Goodyear still posted a first half loss of $51.8 million, driven by its first quarter results, it was a marked improvement from 2003’s first half loss of $249.5 million.
The North American Tire unit showed a profit of $30.4 million for the quarter, up from 2003’s loss of $10.2 million for the second quarter. The division’s second quarter sales were $1.98 billion, up from $1.69 billion for the same period last year, and unit volume of 25.7 million tires was up slightly from 25.3 million last year. Replacement volume increased 5.6 percent in the quarter and by 2.4 percent for the first half, while shipments to OE customers were down 5.9 percent in the quarter and 2.7 percent in the first half compared to the 2003.
The division’s sales were a second quarter record, up 17.1 percent compared to the 2003 period, and up 14 percent for the first six months. Second quarter improvements, said Goodyear, were driven by sustained improvement in Goodyear-brand tires, as well as some stabilization in the company’s private label business.
The tiremaker’s overall second quarter sales of $4.5 billion were a 20.1 percent increase from $3.8 billion during the 2003 period. Tire unit volume in the second quarter of 2004 was 55 million units, compared to 52.8 million units in the 2003 period. Total segment operating income was $285.8 million, up 92 percent from last year.
“With a relentless focus on delivering sustained growth and profitability to our shareholders, we have been directing our attention toward controlling costs, enhancing dealer relationships, focusing on high-margin product lines and introducing new products designed to please customers around the world,” said Robert Keegan, Goodyear chairman and CEO. “This quarter’s profitable results are a direct reflection of the ongoing efforts of our associates and demonstrate that we are on the right track,” he said.
“While we still have work to do, we are pleased by the success we have achieved to date, particularly the traction we are gaining in our North American Tire business, which is reporting a quarterly profit for the first time in nearly two years,” Keegan added.
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