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Apr-25-2008Goodyear Profit Rises on Pricing, Currency Rates (Update3)(topic overview)
CONTENTS:
- The year-earlier deficit included a loss from discontinued operations of $64 million. (More...)
- A price spike on raw materials late last year has not yet fully struck the Tyre maker, which expects raw materials costs to have a more significant impact as the year progresses. (More...)
- Sales benefited from strong pricing and product mix as well as market share gains for Goodyear and Dunlop brand tires in the consumer replacement market. (More...)
- The first quarter of 2007 results factored in an after-tax charges of $64 million due to salaried benefit plan changes, an estimated $34 million related to the 2006 United Steelworkers strike and $31 million in rationalization and accelerated depreciation charges. (More...)
- The mean estimate of analysts polled by Thomson Reuters, which typically exclude items, was for a profit of 47 cents a share in the March period. (More...)
- NEW YORK (Associated Press) - Goodyear Tire & Rubber, which is scheduled to report quarterly results on Friday, is benefiting from cost-savings initiatives, including plant closures and better pricing, says Deutsche Bank analyst Rod Lache. (More...)
- Built in 1944 by U.S. government, Goodyear's Topeka tire plant is the largest Goodyear OTR tire plant in the world and the only one in North America. (More...)
- The company has reduced health care expenses for retired manufacturing workers, and since 2004 has cut more than 25 million units of tire production. (More...)
- Gross margin was 19.9 percent for the 2008 first quarter compared to 16.8 percent last year. (More...)
- Five Wall Street analysts had a consensus revenue estimate of $4.78 billion for the quarter. (More...)
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The year-earlier deficit included a loss from discontinued operations of $64 million. Goodyear said improved pricing and product mix in all four of its business segments drove revenue per tire up 7% over the 2007 quarter, 'reflecting the company's successful strategy to focus on high value-added tires.' Goodyer said it saw weak original equipment markets in North America as well as soft consumer replacement demand in North America and Europe, particularly for low value-added tires. Goodyear said it made additional progress during the first quarter on its plan to achieve $1.8 billion to $2 billion in gross cost savings by the end of 2009. "We have now achieved more than $1.2 billion in savings since beginning this plan and remain on target to reach our four-year goal,' Goodyear chairman and CEO Robert Keegan said in a statement. [1] Europe, Middle East and Africa Tire's first quarter sales grew 16% to $1.95 billion from $1.69 billion last year, boosted by favorable currency translation, improved pricing and product mix and market share gains in the consumer replacement and commercial replacement markets.[2] Asia Pacific Tire's first quarter sales were a record for any quarter and up 21 percent over last year due to favorable currency translation, higher volume and improved pricing and product mix.[3]
Segment operating income was a first quarter record and up 24 percent due to improved pricing and product mix of $40 million, which more than offset increased raw material costs of $4 million.[3] The improvement was due to improved pricing and product mix of $13 million, which more than offset $4 million in increased raw material costs, as well as higher volume, favorable currency translation and lower selling, administrative and general expenses.[3] Improved pricing and product mix of $37 million, a $12 million gain from the settlement of an excise tax case and favorable currency translation more than offset higher manufacturing costs and selling, administrative and general expenses.[3]
Sales totaled $4.94 billion for the latest three months, up 10% from $4.5 billion in the same period a year earlier and ahead of the average analysts' estimate of $4.78 billion. Goodyear attributed the revenue increase to improved pricing and product mix, which offset lower volume from original equipment makers in North America and soft consumer replacement demand in both North America and Europe.[4] North American tire sales fell 1 percent in the quarter, but Goodyear recorded an operating profit in the quarter compared with a loss from a year ago, helped by improved pricing and product mix.[5]
Goodyear's first quarter 2008 sales were $4.9 billion, a 10 percent increase compared with the 2007 quarter, offsetting lower volumes with higher prices, a richer product mix and favorable currency translation.[6] Goodyear today reported that its first quarter 2008 sales were $4.9 billion, a 10% increase vs. the same period last year, and a higher net income that was driven by higher prices, better product mix and favorable currency exchange rates.[7]
On average, analysts polled by First Call/Thomson Financial had expected earnings of $0.47 per share on revenues of $4.78 billion. Sales results benefited as higher prices, a richer product mix and favorable currency translation. these factors helped offset lower volumes.[8] Quarterly net sales totaled $4.942 billion, 10% higher than the previous year's sales of $4.499 billion, offsetting lower volumes with higher prices, a richer product mix and favorable currency translation.[2]
DETROIT -- Goodyear Tire & Rubber Co. swung to a first-quarter profit of $147 million on product price increases, the sale of high-end tires and a boost from currency exchange rates.[9] NEW YORK (Thomson Financial) - Goodyear Tire & Rubber Co. Friday reported first-quarter earnings of $147 million, or 60 cents a share. These results include financing fees related to debt repayment of 18 cents a share, rationalization charges of 5 cents a share, a gain of 13 cents a share from asset sales and a gain of 3 cents a share from a tax settlement.[4] The 2008 quarter included after-tax financing fees related to debt repayment of $43 million (18 cents per share), $13 million (5 cents per share) in after-tax rationalization charges, an after-tax gain on asset sales of $33 million (13 cents per share) and an after-tax gain on an excise tax settlement in Latin America of $8 million (3 cents per share).[3]
The company reported a first-quarter net profit of $147 million, or 60 cents per share. This compared to a loss of $174 million, or 96 cents per share, in the same period last year. Both periods included certain one-time items. This year's results contained after-tax financing fees related to debt repayment of $43 million, or $0.18 per share.[8] The largest U.S. tire maker reported net income of 60 cents a share, compared with a loss of $174 million, or 96 cents a share, a year earlier, the Akron, Ohio, company said Friday. Costs rose last year due to a late-2006 strike that idled most of its U.S. plants.[9]
The tiremaker reported net income in the quarter of $147 million, or 60 cents a share, compared to a loss of $174 million, or 96 cents a share, in the first quarter of 2007.[1] The Akron, Ohio-based company posted first quarter net income of $147 million or $0.60 per share, compared to a loss of $174 million or $0.96 per share in the year-ago quarter.[2] First quarter 2008 net income from continuing operations was $147 million (60 cents per share). This compares to a loss from continuing operations of $110 million (61 cents per share) in the year-ago quarter.[3]
Akron-based Goodyear said it earned $147 million, or 60 cents per share, in the quarter that ended March 31st. That compares with a loss of $174 million, or 96 cents per share, in the same period in 2007.[10] A year earlier, Goodyear lost $174 million, or 96 cents per share, in sales of $4.5 billion.[11] Goodyear reported first-quarter net profit of $US147 million, or 60 cents per share, compared with a net loss of $US174 million, or 96 cents per share, a year earlier.[12]
During its first quarter last year, the company posted a $174 million dollar loss, or -94 cents a share, and going into today's earnings report Wall Street had been looking to see the company show Q1 earnings of 47 cents.[13] The company's Latin American Tire generated first quarter sales growth of 29% to $530 million from $410 million in 2007, and segment operating income climbed 46% to $114 million from $78 million last year.[2] The company estimates the USW strike reduced 2007 first quarter sales by $102 million and segment operating income by $34 million.[2]
Segment operating income set a first quarter record at $367 million in 2008, up 62 percent from $226 million in the strike-affected 2007 first quarter.[6]
Favorable currency translation positively impacted sales by $341 million and segment operating income by $27 million in the quarter.[3] Foreign currency translation added $US341 million to sales and $US27 million to operating income, Goodyear said.[12]
NEW YORK (Reuters) - Shares of Goodyear Tire & Rubber Co (GT.N: Quote, Profile, Research ) rose before the opening bell on Friday after the company posted a quarterly profit on higher sales of more expensive goods and a favorable currency translation that offset rising costs and the U.S. economic slowdown ID:nN25354894.[14] April 25 (Bloomberg) -- Goodyear Tire & Rubber Co., the largest U.S. tiremaker, posted a first-quarter profit of $147 million after a year-earlier loss as it cut labor costs, sold more premium-line tires and benefited from currency rates.[15]
Goodyear Tire & Rubber Co. (NYSE: GT) has posted a first-quarter profit compared to a year-ago loss on record sales in the latest first quarter.[1] AKRON, Ohio (AP) — Goodyear Tire & Rubber Co. says it swung to a profit on higher revenue in the first quarter, reversing last year's loss by focusing on higher-priced tires and international markets.[11]
The Goodyear Tire & Rubber Company (NYSE: GT) today reported record first quarter sales and its highest first quarter net income in several years.[6]
North American Tire's first quarter sales edged down 1% to $1.997 billion from $2.017 billion last year, impacted by reduced original equipment volume resulting from lower vehicle production and a decline in the consumer replacement tire market, particularly for low-value-added tires.[2] Sales rose to nearly $5 billion, up from $4.5 billion a year ago, but Goodyear's North American tire segment's sales in the quarter fell 1 percent from last year. Goodyear has about 1,600 employees at its Topeka plant, which makes large tires including those for Humvees used by the U.S. military in Iraq and Afghanistan.[16] Goodyear, the biggest U.S. tire maker, also said sales for the March quarter increased to $4.94 billion from the prior year's $4.5 billion, as revenue per tire rose 7%.[17]
TOKYO (AP) _ Nomura Holdings Inc., Japan's largest securities business group, posted a net loss of $1.48 billion Friday for the January-March quarter, largely because of ties to bad U.S. debt. CHICAGO (AP) _ MB Financial Inc., the parent of MB Financial Bank, said Friday its first-quarter earnings fell 68 percent due to a sharp increase in bad debt tied to fraud. NEW ORLEANS (AP) _ Power plant operator Entergy Corp. said Friday its first-quarter profit rose 46 percent, helped by increased earnings from its nuclear unit.[18]
Robert J. Keegan, chairman and chief executive officer of Goodyear, said in a statement, "Our excellent first quarter results demonstrate the success of our strategies to grow our higher-margin premium product lines, reduce costs and pay down debt." Keegan added, ""While the economy remains a concern, we continue to be confident about the opportunities we see in the market and our ability to take advantage of them." Goodyear said it made additional progress during the first quarter on its plan to achieve $1.8 billion to $2 billion in gross cost savings by the end of 2009. The company said it now achieved more than $1.2 billion in savings since beginning this plan and remain on target to reach its four-year goal.[8] "Our excellent first quarter results demonstrate the success of our strategies to grow our higher-margin premium product lines, reduce costs and pay down debt," said Robert J. Keegan, chairman and chief executive officer. "Each of our four businesses improved margins and operating income as we capitalized on attractive growth opportunities in targeted market segments," he said.[6]
"Over the last five years, our strategic decisions have better positioned Goodyear to face an economic downturn and to emerge as a stronger competitor." Goodyear said it made additional progress during the first quarter on its plan to achieve $1.8 billion to $2 billion in gross cost savings by the end of 2009. "We have now achieved more than $1.2 billion in savings since beginning this plan and remain on target to reach our four-year goal," Keegan said.[6] Gross margin for the latest quarter was 19.9%, compared to 16.8% reported in the corresponding quarter of the previous year. Goodyear said it made additional progress during the first quarter on its plan to achieve $1.8 billion to $2 billion in gross cost savings by the end of 2009. The company also stated that it now achieved more than $1.2 billion in savings since beginning this plan and remain on target to reach its four-year goal.[2]
"On balance, we were disappointed with (North America)," JP Morgan analyst Himanshu Patel said in a note to clients. He said international operations were responsible for the company exceeding JP Morgan's forecast. Mr Patel said weaker sales of consumer tyres to both vehicle manufacturers and the replacement market in North America was a potential concern. In the past, Goodyear has said lower sales to manufacturers had a neutral to positive impact because the company could shift those tyres to the replacement market where it makes higher margins. The company has raised prices to more than cover rising costs for raw materials, such as natural rubber and petroleum-based synthetic rubbers. It expects those costs to rise 7 per cent to 9 per cent for the year. Tyremakers have eliminated significant production capacity in North America in recent years, giving them room to cope with declines in tyre shipments without resorting to price cuts.[12] Goodyear, the largest U.S. tyremaker, said the slowing U.S. economy remained a concern, but it was on track to meet long-term cost-cutting goals. The company sold fewer tyres worldwide due to weak demand from vehicle manufacturers in North America and from consumers in North America and Europe, but its average revenue per tyre rose 7 per cent over a year earlier in constant currency terms.[12]
Goodyear, the largest U.S. tire maker, said the slowing U.S. economy remained a concern and it would likely cut production by 5 million tires in North America over the balance of 2008 to align with lower demand from vehicle manufacturers. The company also cut its industrywide forecast sharply for North American tire demand from manufacturers of cars and light trucks such as sport utility vehicles and pickups. It also cut its forecast for consumer replacement tire demand in the region.[19]
Goodyear sold fewer tires worldwide in the first quarter due to weak demand from vehicle manufacturers in North America and from consumers in North America and Europe.[19]
All three of the company's businesses outside of North America achieved record sales for any quarter during the 2008 first quarter as the emerging markets businesses continued to grow.[3] North American Tire's first quarter sales decreased 1 percent from last year.[3] The segment covering Europe, the Middle East and Africa increased 16 percent over last year, Latin America sales increased 29 percent and Asia Pacific's first quarter sales were up 21 percent.[5]
Excluding one-time items, the company stated that it had earned 67 cents per share. Currently the stock has moved up 4.5% in premarket trading following its earnings release. One of the factors contributing to the dramatic reversal of fortunes from last year's first quarter was the 12-week United Steelworkers strike that impacted its Q1 2007 quarter.[13] On average, 8 analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.47 per share for the quarter.[2]
The 2007 quarter was impacted by after-tax charges of $64 million (35 cents per share) due to salaried benefit plan changes, an estimated $34 million (19 cents per share) related to the 2006 United Steelworkers strike and $31 million (17 cents per share) in rationalization and accelerated depreciation charges.[3] The biggest U.S.-based tiremaker said Friday that it earned $147 million, or 60 cents per share, on sales of $4.94 billion in the three months that ended March 31.[11]
DETROIT -- Goodyear Tire & Rubber Co posted a stronger-than-expected quarterly profit, driven by price hikes, sales of more expensive tyres and favourable foreign exchange rates, sending its shares up 7 per cent.[12] DETROIT (Reuters) - Goodyear Tire & Rubber Co (GT.N) posted a stronger-than-expected quarterly profit on Friday, driven by price increases, the sale of more expensive tires and favorable foreign exchange rates, sending its shares up 6.4 percent.[19]
Profits included financing fees related to debt repayment of 18 cents a share, rationalization charges of 5 cents a share, a gain on asset sales of 13 cents and a gain on an excise tax settlement in Latin America of 3 cents. Excluding those items, Goodyear would have earned around 67 cents, well ahead of the 47-cent consensus.[20] The latest quarter results encompassed after-tax financing fees related to debt repayment of $43 million, $13 million in after-tax rationalization charges, an after-tax gain on asset sales of $33 million and an after-tax gain on an excise tax settlement in Latin America of $8 million.[2]
A price spike on raw materials late last year has not yet fully struck the Tyre maker, which expects raw materials costs to have a more significant impact as the year progresses. North America, its largest unit, reported operating income of $US32 million, compared with a loss of $US20 million a year earlier. [12] Operating income in North America increased to $32 million from a loss of $20 million in 2007, even as the company sold 1.5 million fewer tires in the region.[15]
Price increases and a sale of a higher percentage of more expensive tires added $157 million to operating income.[19]
Sales for the quarter increased 10% to $4.9 billion. The tire maker is benefiting from its strategic move to introduce more higher-end products to better appeal to consumers who are driving luxury cars and crossovers.[9] To refresh your memory, the strike started in October 2006 and ran into the start of 2007. Another difference is that the 2007 quarter contained the company's engineered products business. Goodyear sold off almost all of this division in August to The Carlyle Group for a reported $1.4 billion. The company noted that a big reason for this quarter's knockout numbers was its focus on higher-end tire products which enabled it able to thrive despite the current economic slowdown in America.[13] There were also large costs as Goodyear prepared to divest some engineered products ventures and make changes to salaried workers' benefits. The company sold nearly all of its engineered products business in a deal that closed on Aug. 1 for $1.48 billion to EPD Inc., of Washington-based private equity firm The Carlyle Group.[5]
For more information about Goodyear, go to www.goodyear.com/corporate. These factors include, but are not limited to: actions and initiatives taken by both current and potential competitors; increases in the prices paid for raw materials and energy; our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; whether or not the various contingencies and requirements are met for the establishment of a Voluntary Employees' Beneficiary Association (VEBA) to provide healthcare benefits for current and future USW retirees; potential adverse consequences of litigation involving the company; pension plan funding obligations; as well as the effects of more general factors such as changes in general market or economic conditions or in legislation, regulation or public policy. This earnings release presents total segment operating income and net debt, each of which are important financial measures for the company but are not financial measures defined by GAAP.[3] "Our excellent first-quarter results demonstrate the success of our strategies to grow our higher-margin premium product lines, reduce costs and pay down debt," said Robert J. Keegan, chairman and CEO of Goodyear.[20] Goodyear's chairman and chief executive Robert J. Keegan says the results demonstrate success in emphasizing higher-margin premium product lines, reducing costs and paying down debt.[10]
The results "demonstrate the success of our strategies to grow our higher-margin premium product lines, reduce costs and pay down debt,'' Chief Executive Officer Robert Keegan said in the statement.[15]
Sales benefited from strong pricing and product mix as well as market share gains for Goodyear and Dunlop brand tires in the consumer replacement market. [3] Goodyear GT said it had record first-quarter sales and its best profit for the period in years as improved pricing and a better mix of products offset lower volumes.[20] The company further noted that the improved pricing and product mix in all four businesses drove revenue per tire up 7% over last year, reflecting the company's successful strategy to focus on high-value-added tires.[2]
Net sales for the quarter grew 10% and revenue per tire up 7% over last year.[2]
The effects of a three-month strike by workers in late 2006 spilled over into last year's first-quarter, reducing sales by in the period by about $102 million, Goodyear said. Goodyear said it has saved $1.2 billion after renegotiating labor agreements and cutting production, and expects to reach its goal of $1.8 billion to $2 billion in savings by the end of 2009.[15] Cost of goods sold during the quarter rose to $3.96 billion from $3.74 billion in the prior year quarter, while selling, administrative and general expenses dropped to $635 million from $663 million in the same quarter of last year.[2] Sales rose to $4.94 billion in the quarter from $4.5 billion a year ago.[10] The Akron, Ohio, tiremaker said sales for the quarter rose 10% from a year ago to $4.94 billion.[20]
Sales in the Europe, Middle East and Africa region rose to $1.95 billion, while Latin America gained 29 percent to $530 million, and Asia rose 21 percent to $465 million.[15] Sales rose 9.8 percent to $4.94 billion, the Akron, Ohio-based company said today in a statement.[15]
Analysts polled by FactSet Research had been looking, on average, for earnings of 50 cents a share on sales of $4.83 billion.[17] In the same period a year earlier, the Akron, Ohio-based tire maker lost $174 million, or 96 cents a share, including discontinued operations.[4] Goodyear rose $2, or 7.3 percent, to $29.25 at 10:01 a.m. in New York Stock Exchange composite trading, after touching $30.10. Shares fell 3.4 percent this year through yesterday.[15] Goodyear shares rose $1.57, or 5.8 percent, to $28.83 in morning trading Friday.[5]
NEW YORK -- Shares of Swedish wireless equipment maker LM Ericsson AB rose sharply in premarket trading Friday after the company reported its first-quarter profit fell 55 percent, which was less than expected.[21] Softening consumer demand was mainly in lower-priced tires that produce lower profits and its average revenue per tire rose 7 percent. It also said it had not seen evidence of consumers trading down to less expensive tires.[19]
CLEVELAND (AP) - Goodyear Tire and Rubber swings to a profit in the first quarter by focusing on higher-priced tires and international markets.[22] The company's tire units sales were down compared to the first quarter of 2007.[7] Unit sales for the first period of 2008 were down 1.7 million tires compared to the same period in 2007, with North American unit sales down 1.5 million tires.[7]
The company said the lower volume came primarily from OE sales in North America and soft consumer replacement demand in North America and Europe, particularly for low-end tires.[7] All three of the company's business segments outside of North America achieved sales gains.[5]
Goodyear's strategy has been to sell more expensive, higher-margin brands in North America, which has helped offset reductions in mostly low-margin Tyre sales to vehicle manufacturers.[12]
Tyre unit volume was down nearly 8 per cent to 17.8 million tyres in North America in the quarter, mainly because of lower shipments to vehicle manufacturers.[12]
The first quarter of 2007 results factored in an after-tax charges of $64 million due to salaried benefit plan changes, an estimated $34 million related to the 2006 United Steelworkers strike and $31 million in rationalization and accelerated depreciation charges. [2] Favorable currency translation boosted sales by $341 million in the latest quarter.[20] The 2007 quarter included about $150 million in sales from T&WA;, which was divested in December 2007.[2]
Net sales increased to $4.94 billion from $4.49 billion in the year-ago quarter.[8]
At the end of the latest quarter, the company said it achieved more than $1.2 billion in cost savings.[17]
The world's third largest tiremaker said today it earned $147 million in the quarter that ended March 31 compared to a $174 million loss in the same period in 2007.[16] Net income for the period was $147 million, and improvement of $321 million year-over-year.[7]
Currency-exchange rate gains added $341 million to revenue, Goodyear said.[15] Shares of Goodyear were climbing 5.3% to $28.70 in premarket trading Friday.[20] Analysts surveyed by Thomson Financial expected Goodyear to post earnings of 47 cents per share. Such estimates usually exclude special items.[5] Excluding one-time charges, Goodyear earned 67 cents per share from continuing operations.[5] Excluding various one-time items, Goodyear says it earned 67 cents per share from continuing operations.[11] Goodyear earned 67 cents per share excluding one-time items. On that basis, analysts, on average, expected 48 cents per share, according to Reuters Estimates.[19]
The mean estimate of analysts polled by Thomson Reuters, which typically exclude items, was for a profit of 47 cents a share in the March period. [4] Per-share profit excluding fees related to debt repayment and other gains and charges was 67 cents.[15]
Net debt is total debt (the sum of long term debt and capital leases, notes payable, and long-term debt and capital leases due within one year) minus cash and cash equivalents. Management believes net debt is an important measure of liquidity, which it uses as a tool to assess the company's capital structure and measure its ability to meet its future debt obligations. Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce our debt obligations.[3]
Segment operating income was a record for any quarter, increasing 46 percent compared to the prior year.[3] Segment operating income for the Europe, Middle East and Africa business was a first quarter record.[3] Segment operating income for the Latin America and Asia Pacific businesses were records for any quarter.[3]
Management believes that total segment operating income is useful because it represents the aggregate value of income created by the company's SBUs and excludes items not directly related to the SBUs for performance evaluation purposes.[3]
"Each of our four businesses improved margins and operating income as we capitalized on attractive growth opportunities in targeted market segments." Goodyear said that although the health of the economy remains a concern, "we continue to be confident about the opportunities we see in the market and our ability to take advantage of them."[20]
NEW YORK (Associated Press) - Goodyear Tire & Rubber, which is scheduled to report quarterly results on Friday, is benefiting from cost-savings initiatives, including plant closures and better pricing, says Deutsche Bank analyst Rod Lache. [23] Associated Press - April 25, 2008 7:25 AM ET AKRON, Ohio (AP) - Goodyear Tire & Rubber Co. says it has substantially reversed a year-ago first-quarter loss by focusing on higher-priced[10]
Built in 1944 by U.S. government, Goodyear's Topeka tire plant is the largest Goodyear OTR tire plant in the world and the only one in North America. [24] About 60 percent of Goodyear's revenue came from outside of North America, Keegan said.[5]
Lower volume primarily resulted from weak original equipment markets in North America as well as soft consumer replacement demand in North America and Europe, particularly for low-value-added tires.[2]
Sales in the 2008 quarter were impacted by reduced original equipment volume resulting from lower vehicle production and a decline in the consumer replacement tire market, particularly for low-value-added tires.[3] Goodyear sold more higher-priced tires, while a weak dollar helped boost sales 16 percent in Europe, Middle East, and Africa.[15] The tire maker posted 10% sales growth and improved margins in each of its businesses.[8]
The company has reduced health care expenses for retired manufacturing workers, and since 2004 has cut more than 25 million units of tire production. "They are the poster child for people that benefit from a weak dollar,'' said Kirk Ludtke, senior analyst with CRT Capital Group LLC in Stamford, Connecticut in an interview. "They make all their money outside the U.S. and a weak dollar discourages tire imports.'' [15] Based on a successful acquisition, ATC is going to spend US$200 million to modernize the plant, increase production capacity by at least 20 percent for all sizes of OTR tires, and create more job opportunities with a better annual pay rate. According to an ATC official, this proposed acquisition will not affect its manufacturing activities in Washington. It is just a further expansion of its OTR tire business.[24]
Most of the Goodyear brand Off-the-Road (OTR) tires sold in the U.S. are produced in Goodyear's Topeka plant which is Goodyear's largest and oldest OTR tire production facility. American Tire Corporation proposes to acquire this facility in to further expand its OTR tire business.[24] The year-ago results were affected by higher costs due to a strike late in 2006 that idled most of Goodyear's U.S. plants.[17] Goodyear's results got a lift from a strategic move toward higher-end products for luxury cars and crossovers, as well as additional progress to cut costs.[17]
"On balance, our view of Goodyear's performance for the quarter is highly positive," Calyon Securities analyst Mark Warnsman said in a note to clients. Mr Warnsman said raw material cost increases "remain a valid and ongoing concern," but he pointed to Goodyear's ability to more than cover those costs so far.[12]
Gross margin was 19.9 percent for the 2008 first quarter compared to 16.8 percent last year. [6] Revenue per tire rose 7% during the quarter although the company sold fewer tires primarily because of weak demand from auto makers.[9] While the company sold fewer tires world wide, the average price per tire rose by an impressive 7%.[13]
Goodyear is one of the world's largest tire companies. Fortune magazine named Goodyear the World's Most Admired Motor Vehicle Parts Company in its 2008 list of the World's Most Admired Companies.[3] The company is also listed on Forbes magazine's list of the Most Trustworthy Companies in America and CRO magazine's ranking of the 100 Best Corporate Citizens. Goodyear employs about 70,000 people and manufactures its products in more than 60 facilities in 25 countries around the world.[3]
The consumer version of the Wrangler MT/R tire is Goodyear's superior traction tire for off-road enthusiasts, featuring exclusive Durawall Technology, which helps resist punctures and cuts. This kind of toughness is especially sought after by desert racers who tackle the toughest terrain, such as sand, mud and rocks.[25] Under the proposal, ATC is willing to buy out Goodyear's OTR tire plant in Topeka, Kansas at any reasonable price.[24]
Five Wall Street analysts had a consensus revenue estimate of $4.78 billion for the quarter. [2] Shares slipped 4.3 percent to $30.44. Ford Motor Co. was downgraded to "Neutral" from "Overweight" by a JPMorgan analyst, who said its shares have risen 25 percent year-to-date, close to their fair value.[21] The results from the biggest U.S.-based tiremaker beat Wall Street expectations and its shares rose almost 6 percent in morning trading.[5]
SOURCES
1. Crain's Cleveland Business: Goodyear solidly in the black
2. Goodyear Swings To Profit In Q1 On Price Hike - Update [GT] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
3. The Goodyear Tire & Rubber Company :: Goodyear Achieves Record First Quarter Results
4. Goodyear Tire 1Q earnings $147M; sales jump 10% on better pricing, product mix - Forbes.com
5. The Associated Press: Goodyear swings to profit in 1Q, revenue rises
6. SunHerald.com : Goodyear Achieves Record First Quarter Results
7. Tirereview - Global Tire News
8. Goodyear Posts Q1 Profit; Sales Rise 10% [GT] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
9. Goodyear Tire Swings To First-quarter Profit
10. WTOL.com, Toledo's News Leader, News 11 | Goodyear's 1Q gain reverses year-ago loss
11. The Associated Press: Goodyear swings to profit in 1Q
12. Business Spectator - Goodyear Q1 profit beats estimates
13. Goodyear Tire (GT) rolls in with a profit - BloggingStocks
14. Goodyear shares up on profit | Markets | Hot Stocks | Reuters
15. Bloomberg.com: U.S.
16. Goodyear reports to profit in 1st quarter, revenue rises - KTKA.com
17. UPDATE: Goodyear Swings To Quarterly Profit As Sales Rise 10%
18. Earnings roundup: Goodyear Tire & Rubber, Nomura
19. Goodyear profit beats estimates, shares jump - washingtonpost.com
20. Goodyear Swings to Profit; Sales Climb 10% | Industrials | BRDCY CTB GT MGDDF - TheStreet.com
21. Ericsson, Goodyear shares help lift premarket trading | Chron.com - Houston Chronicle
22. NTV - KHGI/KWNB/WSWS-CA - Where your news comes first. - Grand Island, Kearney, Hastings, Lincoln | Goodyear swings to profit in 1Q, revenue rises
23. On the Watch: Goodyear Tire & Rubber to report
24. American Tire Corporation to acquire Goodyear's OTR tire plant
25. WhoWon.com . The Internet Source for Motorsports News and Information
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