Goodyear Posts Record Quarterly Sales Figures
CLEVELAND (AP) — Goodyear Tire & Rubber Co. sold more tires at higher prices in the first quarter, helping it set a company sales record for any quarter and reverse a loss from the first quarter of 2010.
Goodyear shares rose more than 10 percent to $17.87 after the opening bell, a new 52-week high. By midmorning, Goodyear's 12 percent increase was the most of any company in the Standard & Poor's 500 index.
Goodyear said Friday that it earned $103 million, or 42 cents per share, on revenue of $5.4 billion. Excluding charges, Goodyear earned 51 cents, easily beating Wall Street estimates of 12 cents and $4.89 billion.
In the first quarter of 2010, Akron-based Goodyear lost $47 million, or 19 cents a share, on revenue of $4.3 billion.
Goodyear sold almost 7 percent more tires in the January-March period over the first quarter of 2010 and its per-tire revenue was up 15 percent, reflecting a goal of developing high-performance products.
First-quarter revenue was aided by chemical sales in North America and the effects of the weaker dollar, which results in overseas sales translating back into more dollars.
Chairman and CEO Richard J. Kramer said improving performance in North America would help the company reach its 2013 targets.
Sales in its North American Tire unit rose 30 percent from the same period in 2010 to $2.3 billion, reflecting 13 percent more tires sold and 12 percent more revenue per tire.
Goodyear also benefited from lower pension costs in North America.
Sales increased 28 percent in Goodyear's Europe-Middle East-Africa unit over the first quarter of 2010, 22 percent in Latin America and 14 percent in its Asia-Pacific region.
"All of our businesses made great progress in offsetting higher raw material costs through improved price/mix and in driving sales of new, innovative products," Kramer said.
Kramer said in a call with analysts that higher gasoline prices — which can lead to less driving and slower tire replacement — can cut both ways for Goodyear.
"Historically, as gas prices have spiked to the $4 level, there's been a decline in fuel consumption," he said.
"And, while higher fuel prices enhance the value of our fuel-efficient tires, the future impact on long-term consumer behavior is uncertain. We are not seeing any impact at this point."