Goodyear Reports Higher First Quarter Earnings - Segment operating income increases, despite weakness in Europe

Bangkok--28 May--Aziam Burson-Marsteller

• Three of four businesses report operating income growth
• Full-year segment operating income outlook remains at $1.4 to $1.5 billion
• Company continues to target positive cash flow in 2013, excluding pension pre-funding

The Goodyear Tire & Rubber Company today reported higher earnings for the first quarter of 2013 compared to the year-ago quarter.

“Despite a tough economic environment, we continue to achieve solid earnings improvement,” said Richard J. Kramer, chairman and chief executive officer. “Our first quarter earnings demonstrate that our strategic focus on improving productivity and selling innovative products in targeted market segments where our brands add value is working, especially in North America, where our business continues to outperform expectations.”

Three of Goodyear’s four regional businesses posted higher earnings with North America and Asia Pacific posting record first quarter operating income. Asia Pacific and Latin America achieved both increased tire unit volume and higher operating income.

“We remain confident in our full-year outlook and continue to expect global segment operating income of $1.4 billion to $1.5 billion in 2013, which would be up more than 12 percent from 2012 and a record,” Kramer said. Goodyear is forecasting its 2013 tire unit volumes to be essentially at 2012 levels as a result of weak industry conditions, especially in Europe.

Goodyear’s first quarter 2013 sales were $4.9 billion, compared to $5.5 billion a year ago. First quarter 2013 sales reflect $364 million in lower tire unit volumes; $178 million in lower sales in other tire related businesses, and $115 million in unfavorable foreign currency translation. Tire unit volumes totaled 39.5 million, down 8 percent from 2012, primarily reflecting lower volumes in Europe.

The company reported segment operating income of $302 million in the first quarter of 2013. This was up 3 percent from the year-ago quarter, reflecting $230 million in lower raw material costs and cost-reduction activities that exceeded inflation.

First Quarter Business Segment Results – Asia Pacific

Asia Pacific Tire

First Quarter

(in millions)

2013 2012

Tire Units

5.1

4.9

Sales

$567 $577

Segment Operating Income $84

$67

Segment Operating Margin 14.8% 11.6%

Asia Pacific’s first quarter sales decreased $10 million from last year to $567 million. Sales were negatively impacted by $15 million in lower sales in other tire-related businesses and $14 million in unfavorable foreign currency translation. Original equipment unit volume was up 5 percent. Replacement tire shipments were up 4 percent.

First quarter segment operating income of $84 million was up 25 percent from last year and a first quarter record. -NT-

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