Goodyear Posts Profit for the First Time Since 2002

Goodyear Tire & Rubber Co. (GT) reported a profit for the second quarter, getting the nation's largest tiremaker out of the red for the first time since 2002.

The company said Thursday it earned $25.1 million, or 14 cents per share, on record sales of $4.5 billion, in the three months ended June 30. That's compared to a loss of $53 million, or 30 cents per share, on sales of $3.8 billion in the same quarter a year ago.

Analysts surveyed for Thomson First Call (search) expected second-quarter earnings on average of 8 cents a share.

Goodyear sold 55 million tires in the second quarter, up from 52.8 million in the same quarter last year.

For the first six months of the year, Goodyear lost $51.8 million, or 30 cents per share, on sales of $8.8 billion. The company lost $249.5 million, or $1.42 per share, on sales of $7.3 billion in the first six months of 2003.

All seven Goodyear business units were profitable in the second quarter.

The profit was the first for the company's struggling North American Tire division since 2002. The company lost more than $2 billion overall in 2002 and 2003. It hasn't had a quarterly profit at the corporate level since earning $28.2 million in the third quarter of 2002.

"With a relentless focus on delivering sustained growth and profitability to our shareholders, we have been directing our attention toward controlling costs, enhancing dealer relationships, focusing on high-margin product lines and introducing new products designed to please customers around the world," said Robert J. Keegan, chairman and chief executive.

"This quarter's profitable results are a direct reflection of the ongoing efforts of our associates and demonstrate that we are on the right track," Keegan said.

Last month, Goodyear hinted that it may return to profitability in the quarter.

Goodyear and analysts welcomed that good news but acknowledged the company still has work to do to recover from 6,000 job cuts, accounting errors that cost it $280 million and more than $3 billion on restructuring.

Goodyear manufactures tires, engineered rubber products and chemicals in more than 80 facilities in 28 countries. The company employs approximately 86,000 people worldwide.