Goodyear on Friday reported a profitable third quarter, although earnings and
revenue were substantially lower than a year ago as tire sales slowed.
The Akron tire maker's results failed to meet analyst expectations and Goodyear shares fell. Shares were down 97 cents, or 7.9 percent, to $11.33 as of 10:15 a.m.
The Akron tire maker also said that its critical North American Tire segment had a strong financial performance and is on track to meet corporate profitability goals a full year ahead of schedule.
Goodyear Tire & Rubber Co. earned $110 million, or 41 cents per share, on revenue of $5.3 billion. Net income was down 31.7 percent from $161 million, or 60 cents per share, for the third quarter of 2011. Revenue was down 13.2 percent from a quarterly record $6.1 billion a year ago.
Adjusted earnings were 53 cents per share; a survey of analysts by Bloomberg News expected Goodyear to show 59 cents per share of adjusted earnings.
The company said it expects tire sales in the final quarter of the year to be down 3 percent to 5 percent from a year ago. For the full year in North America, consumer tire sales likely will be down 2 to 3 percent and original equipment tire sales will be up between 8 and 10 percent. Commercial replacement tire sales will be down 6 to 8 percent, while original equipment commercial tire sales will also be up 6 percent to 8 percent.
Goodyear continues to execute under its strategic plan, Richard Kramer, chairman and chief executive officer, said in a conference call with analysts.
"We're not running our business for one good quarter or one good year," he said.
North American Tire delivered an outstanding quarter and will meet or exceed internal goals by a full year, he said.
North American Tire had third quarter operating income of $130 million on sales of $2.4 billion, compared to revenue of $78 million on sales of nearly $2.6 billion for the third quarter of 2011. Tire sales totaled 15.6 million, down from 16.6 million a year ago.
For the first nine months of 2012, North American Tire had income of $398 million on revenue of $7.3 billion compared to income of $255 million on revenue of nearly $7.3 billion for the same period in 2011. Tire sales were 46.8 million compared to 49.4 million for the same nine months in 2011.
The company also is on track to exceed its three-year, $1 billion cost reduction plan, he said.
While tire sales were down, revenue per tire was up, Goodyear said.
"We achieved solid segment operating income in the third quarter, driven by our performance in North America," Kramer said in a statement. "While we were impacted by the macroeconomic challenges we face in Europe, we continue to see the benefits of our actions to sustain profit margins in a weak volume environment."
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