Goodyear's revenues fall 30% on 20% volume decline in Q1

ERJ staff report (TB)

AKRON (April 29, 2009)-Goodyear posted a loss of $333 million in the first quarter on weak global demand for its products and a nearly 30-percent decline in sales, despite a volume decline of just 20 percent.

The company's loss compared to earnings of $147 million in last year's first quarter. Sales fell to $3.54 billion in the quarter.

The company said the weak sales reflect the $766 million impact of a 20-percent decline in tire unit volume because of significantly lower global industry demand. In addition, Goodyear said unfavorable currency translation reduced sales by $484 million.

In Goodyear's North American Tire unit, sales fell 22.7 percent to $1.54 billion. The unit also has a loss of $189 million vs. a profits of $32 million a year ago, as tire unit volume slid 21.9 percent to 13.9 million units.

Goodyear's total segment operating loss of $176 million in the quarter reflects weak industry demand across all of the company's businesses, the company said. That resulted in a negative volume impact of $138 million, under-absorbed fixed costs of approximately $200 million and declines in its other tire-related business.

The firm said higher raw material costs-which increased 31 percent, or about $332 million-more than offset improved price/mix of $161 million.

First quarter results also were impacted by after-tax charges of $57 million due to rationalizations, asset write-offs and accelerated depreciation, and a gain of $9 million after minority interest primarily because of tax law changes.

From Rubber & Plastics News (A Crain publication)

Press release from Goodyear