Goodyear 2Q earnings up 43 percent on strong North American sales
7/28/2011CLEVELAND — Goodyear Tire&Rubber Co. reported a 43 percent surge in second-quarter earnings Thursday, helped by a 24 percent sales increase.
Goodyear, the biggest tire maker in North America and third largest globally, said it earned $40 million, or 16 cents per share, on sales of $5.6 billion in the three months ending June 30.
In the second quarter of 2010, Akron-based Goodyear earned $28 million, or 11 cents per share, on revenue of $4.5 billion.
For the first six months of the year, Goodyear earned $143 million, or 57 cents per share, on revenue of $11 billion compared with a January-June 2010 loss of $19 million, or 8 cents per share, on revenue of $8.8 billion.
North American sales increased 18 percent to $2.4 billion, a second-quarter record, and reflected stronger sales of high-end tires. Revenue per tire was up 20 percent.
Chairman and CEO Richard J. Kramer added a cautionary note about its core North American market.
"These results will be difficult to repeat in the second half because of increasing raw material cost challenges and uncertain economic conditions," he said.
Sales for the quarter were helped as retailers built up inventories in advance of any price increase amid rising raw material costs.
Excluding one-time charges, the company earned 65 cents per share, easily beating the Wall Street estimate of 25 cents. Analysts typically exclude one-time items from estimates.
Analysts had forecast $5.2 billion in revenue.
The improved price-mix helped Goodyear overcome a 2 percent decline in the number of tires sold, reflecting weaker automotive industry production, particularly in North America.
U.S. auto production fell 2.0 percent in June, after declines in May and April. U.S. automakers have had trouble getting component parts out of Japan in the months after the March 11 earthquakes and tsunami.
Shares rose 3 percent or 52 cents, to $17.69 in early trading, near the upper end of Goodyear's 52-week trading range of $9.10-$18.83.