Industry News
Goodyear sets sales record in second quarter and first half
7th August 2006
The Goodyear Tire & Rubber Company has reported second quarter sales of $5.1 billion, a record for any quarter and an increase of 3% compared to the same 2005 period. Excluding the impact of businesses divested in 2005, second-quarter sales revenues increased 5% year on year, reflecting improved pricing and product mix driven and the favoruable impact of currency translation. Revenue per tire increased 7% compared to the second quarter of 2005.
Four of the company's six businesses achieved higher operating incomes compared to the second quarter of 2005, with three setting records. Total tyre business operating income was $267 million, compared to $316 million in the 2005 period. Divestitures in 2005 reduced second quarter 2006 segment operating income by $14 million.
Second quarter net income was $2 million, which included $63 million in after-tax rationalization and accelerated depreciation costs primarily related to plant closures. Net income was $69 million. The 2006 quarter profit was affected by higher raw material costs of $210 million, an increase of 16% year on year, and weak tire industry demand, particularly in North America.
Global tyre unit volume in the second quarter of 2006 was 54 million units, compared to 56.4 million units in the same 2005 period. 15.7m tyres were sold in Europe, compared to 15.9m a year earlier, but revenues rose to $1.25m from $1.18m as a result of improved price and product mix and a favourable impact from currency translation of approximately $28 million. Q2 operating margin in Europe dropped, however, to 4.6% from 7.2% in the same quarter of 2005 due to higher raw material costs of approximately $48 million; an approximately $20 million increase in manufacturing costs related to higher energy costs and lower production levels.
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