Following a series of bad releases regarding its accounting problems, tire giant Goodyear Tire & Rubber (NYSE:GT) closed out the first half of the year on a positive note.
In the second quarter, revenues at the world's largest tire maker climbed 20.1% to a record $4.5 billion, reflecting improved pricing, increased volume, and stronger sales of higher-margin products, as well as the consolidation of two subsidiaries. As a result, the company turned in a $25.1 million or $0.14-per-share profit, reversing last year's $0.30-per-share loss.
Goodyear noted that a $41 million increase in the cost of raw materials offset savings generated from job cuts and improved productivity. Even so, all seven of Goodyear's business units reported improved operating results.
Most notably, the key North American unit showed a quarterly profit for the first time in almost two years. While shipments to original equipment manufacturers -- companies such as Big Three automakers Ford (NYSE:F), General Motors (NYSE:GM), and DaimlerChrysler (NYSE:DCX) -- dropped 5.9%, a 5.6% increase in replacement volume helped North American overall volume climb 1.6% to 25.7 million units. And with the addition of T&WA's tire-mounting operation and stronger sales of Goodyear-brand tires, sales in North America jumped 17.1% to a record $1.9 billion.
Overall, global tire unit volume increased 4% to 55 million units.
In all, it was a solid report, and one that may help investors forget about the company's recent accounting woes. For more coverage on Goodyear, check out:
- Will Goodyear Have a Good Quarter?, July 27
- Goodyear Retreads -- Again, June 18
- Goodyear Trying to Inflate, May 19
- Oops! Goodyear Did It Again, April 15
- Goodyear's Faux Rubber, March 29
- Goodyear Deflated, March 11
Fool contributor Jeff Hwang owns none of the companies mentioned above.
