Goodyear sees signs of recovery as it reports a net loss for Q2

ERJ staff report (DS)

Akron, Ohio, July 30, 2009 - The Goodyear Tire & Rubber Company today reported second quarter 2009 sales of $3.9 billion, down 25 percent from 2008's record second quarter and down by 17 percent in volume terms. Unfavorable currency translation further reduced sales by $369 million. .

Profit per tyre decreased overall, however, the excessive decline in truck tyre sales, which generate more profit per tyre distorted the figures, so that overall, said Goodyear, "sales benefited from price/mix improvements that resulted in a 1.1 percent increase in revenue per tyre, excluding the impact of foreign currency translation, over the 2008 quarter."

The company had segment operating income of $24 million in the second quarter of 2009, compared to $330 million in the 2008 second quarter and a segment operating loss of $176 million in 2009's first quarter. The company reported a net loss of $221 million, compared with net income of $75 million in 2008's second quarter and a net loss of $333 million ($1.38 per share) in 2009's first quarter.

Europe, Middle East and Africa Tire's second quarter sales declined 31 percent from last year primarily due to lower tire unit volume, reflecting significantly reduced industry demand, as well as foreign currency translation. Original equipment unit volume declined 33 percent. Replacement tyre shipments were down 10 percent.

The second quarter 2009 segment operating loss was significantly impacted by lower sales and production levels, which drove a negative volume impact of $61 million and under-absorbed fixed costs of approximately $82 million. Increased raw material costs of $69 million more than offset price/mix improvements of $35 million. The 2009 quarter also benefited from actions to reduce costs.

Asia Pacific Tire's second quarter sales declined 17 percent from last year due to unfavorable foreign currency translation and lower tire unit volume, reflecting reduced industry demand. Original equipment unit volume declined 6 percent. Replacement tire shipments were down 11 percent.

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Press release from Goodyear