Cleveland_Goodyear Tire & Rubber Co. said Friday that it swung to a profit in the first quarter by focusing on higher-priced tires and international markets. The results from the biggest U.S.-based tiremaker beat Wall Street expectations and its shares rose almost 6 percent in morning trading.
Akron-based Goodyear, the world's third largest tiremaker, said it earned $147 million, or 60 cents per share, in the quarter that ended March 31 compared with a loss of $174 million, or 96 cents per share, in the same period in 2007. Sales rose to $4.94 billion in the quarter from $4.5 billion a year ago.
Excluding one-time charges, Goodyear earned 67 cents per share from continuing operations.
Analysts surveyed by Thomson Financial expected Goodyear to post earnings of 47 cents per share. Such estimates usually exclude special items.
Goodyear shares rose $1.57, or 5.8 percent, to $28.83 in morning trading Friday. The shares have traded in a one-year range of $22.27 to $36.90.
Robert J. Keegan, Goodyear's chairman and chief executive, said the results demonstrate success in emphasizing higher-margin premium product lines, reducing costs and paying down debt.
"While few businesses are immune to the effects of a weaker U.S. economy, and we have certainly experienced weaker conditions in our industry particularly in the OE (original equipment) business, we continue to be confident about the attractive market opportunities we see and our company's ability to fully capitalize on them," Keegan said in a conference call with analysts.
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.
All three of the company's business segments outside of North America achieved sales gains. 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.
About 60 percent of Goodyear's revenue came from outside of North America, Keegan said.
The loss a year ago was in part due to costs from a 12-week United Steelworkers strike that started in October 2006. 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.
Goodyear has about 70,000 employees and makes products in more than 60 factories in 26 countries.
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