Reports of the demise of Goodyear (NYSE: GT) as the top North American tire maker have been exaggerated. Like Mark Twain before, Goodyear seems to be sitting up and taking nourishment.
A report two weeks ago had Goodyear being dethroned for the first time in the U.S. and Canada, at the hands of Japanese tire maker Bridgestone. However, Goodyear's earnings report released last week seems to confirm that Goodyear continues to rule the road, with $8.86 billion in North American sales.
That's a somewhat wider spread than the 3,000-car difference that allowed General Motors (NYSE: GM) to keep its title as world's biggest carmaker away from interloper Toyota Motors (NYSE: TM). Yet Goodyear's efforts were probably just as surprising.
Goodyear earned $52 million, or $0.23 a share, compared with a $2.02-per-share loss last year. Last year's fourth quarter was marred by a crippling 12-week strike, which not only helped the company lose $367 million in the quarter but also gave Bridgestone an opportunity to increase its domestic presence. Goodyear also sold fewer tires in 2007 than it did in 2006, but a combination of price increases and the sale of higher-priced premium tires more than offset the low unit numbers. Revenue per tire rose 10% in the fourth quarter, even though the company sold 1.1 million fewer tires than last year. Meanwhile, the world's No. 2 tiremaker, Michelin, reported a 35% increase in its profits on Friday, and Cooper Tire & Rubber (NYSE: CTB) is expected to report a 10% increase in per-share profits at the end of the month.
Some of Goodyear's ventures have left me scratching my head -- the Goodyear-branded GPS device, for one -- but the continuing focus on making premium tires that appeal to drivers of luxury cars and SUVs has kept Goodyear off life support.
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