Goodyear’s third quarter earnings drop sharply

Goodyear Tire & Rubber Co. reported a net income of $31 million in its third quarter compared to $668 million during the same period last year, according to Dow Jones.

While the company’s tire sales fell 6.7 percent vs. last year, its revenue per tire increased 8 percent. That’s a 2.1 percent increase in revenue to $5.17 billion in the third quarter.

The company’s North American net sales fell 4.4 percent to $2.19 billion, despite an 11 percent increase in revenue per tire. The company recorded an operating loss of $19 million in the third quarter compared to $66 million in profit last year.

Chief Financial Officer Darren Wells said the company expects its capital expenditures to be about $1 billion for 2008, compared with earlier expectations at $1.3 billion.

Chief Executive Robert Keegan stated, “The tire industry is facing challenging business conditions as the global financial crisis and slowing economic conditions are impacting consumer demand in all regions. Our results reflect the economic reality of weakened industry demand and the associated cost impact of production cuts we initiated during the quarter.”

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