Goodyear Q2 Profit Rises - Update

(RTTNews) - Goodyear Tire & Rubber Co. (GT) Wednesday said its second-quarter profit increased from a year ago, despite a decline in revenues, with the tire maker reporting strong earnings at its North America and EMEA businesses while curbing costs.

Earnings for the quarter trumped Wall Street estimates by a penny, but revenues fell short of expectations on lower sales from North America and Latin America.

Akron, Ohio-based Goodyear's second-quarter profit improved to $213 million or $0.76 per share from $181 million or $0.67 per share a year earlier.

Excluding one-time charges and gains, earnings rose to $225 million or $0.80 per share from $209 million or $0.76 per share a year ago. On average, nine analysts polled by Thomson-Reuters expected earnings of $0.79 per share for the quarter. Analysts' estimates typically exclude one-time items.

Goodyear said its second quarter sales declined to $4.65 billion from $4.89 billion last year. Sales also missed analysts consensus estimate of $4.75 billion for the quarter.

Tire unit volumes increase 3 percent to 40.6 million from a year ago, with replacement tire shipments up 6 percent with growth in all four regions. However, original equipment unit volume was down 4 percent, primarily in Latin America.

Cost of goods sold declined to $3.53 billion from $3.85 billion last year.

North America sales decreased 7 percent to $2.04 billion, however, the unit's operating profit climbed 2 percent driven by higher replacement tire volumes. Tire units sold in the North America improved to 15.3 million units from 14.8 million units a year ago.

Europe, Middle East and Africa's operating profit more than doubled to $117 million from $51 million last year. Sales increased $3 million to $1.58 billion from last year.

Latin America operating income plunged to $59 million from $82 million due to continuing economic challenges, while Asia segment operating profit dropped to $76 million from $91 million last year, due to weak demand for OTR tires.

Moving ahead, the company continues to see a 2 to 3 percent rise in unit volumes for the full-year 2014.

GT is currently trading at $25.72, down $1.93 or 6.98%, on the Nasdaq.