Goodyear Benefits from Strong Tire Demand in Asia

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Goodyear Tire and Rubber Company (NASDAQ:GT) (Akron, Ohio) has reported strong quarterly results in the first quarter of 2016, as robust demand for premium-branded, high-value added (HVA) products continued to grow. Industrial Info is tracking active Goodyear manufacturing projects worth $621.60 million.

Goodyear's first-quarter 2016 sales were $3.7 billion, down from $4.0 billion this time last year. It reported net income of $184 million, down from $224 million in the same quarter of 2015. However, the tire manufacturer also reported record segment operating income of $419 million, up from $388 million in first-quarter 2015. Goodyear's Americas segment reported a 15% loss in operating margins, after adjusting for the loss of income from Venezuela. The Asia Pacific segment reported a 16% increase in operating margins, driven by strong demand for premium branded HVA products.

Goodyear completed $50 million in share repurchases in the first quarter, which it said reaffirms 2016 financial targets of 10% to 15% growth in core segment operating income, excluding Venezuela.

Tire unit volumes were up 2% from 2015 with a total of 41.5 million units, which was driven by growth in the Asia Pacific region, primarily in Japan and China. In the Americas, tire unit volumes dropped from 19.2 million units in first-quarter 2015 to 18.0 in the just-ended quarter due to lack of growth in replacement tire shipments.

In the U.S., demand is being driven by lower fuel prices, higher miles driven and growing consumer original equipment needs, particularly in sports utility vehicles and light trucks.

Industrial Info is tracking $35.60 million in active Goodyear projects in the U.S., including a $30.1 million expansion at the company's Gadsden, Alabama plant. The project consist of a 7,500-square-foot building addition and installation of new equipment at the existing facility.

Goodyear is one of the world's largest tire companies. It employs approximately 66,000 people and manufactures products in 49 facilities in 22 countries around the world.

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