UPDATE 2-Goodyear Tire quarterly profit falls on weak Europe sales
Oct 26 (Reuters) - Goodyear Tire & Rubber Co, the top U.S. tire maker, said third-quarter profit fell on lower sales in all its key markets, especially Europe.
Revenue slumped 13.2 percent to $5.26 billion from $6.06 billion in the same quarter a year ago. Net income declined 30.4 percent to $117 million from $168 million a year earlier. Earnings per share were 41 cents, versus 60 cents.
Total tire sales volume dropped 12 percent to 41.8 million, with the largest decline in Europe, racked by a debt crisis. Goodyear said it expects fourth-quarter volume to drop 3 percent to 5 percent from a year earlier, reflecting continued weakness in Europe.
"We do not anticipate significant improvement in the near term" in Europe, Chief Executive Richard Kramer said Friday on a conference call to discuss the company's earnings.
Partially offsetting the decline in Europe, Kramer said the company sees "significant upside" in its North American business as vehicle sales continue to improve.
In North America, Goodyear's largest market, tire sales in the quarter dropped 6 percent to 15.6 million, driving revenue down 6 percent to $2.4 billion. Operating income grew 67 percent to $130 million, helped by lower raw material costs.
The company expects full-year sales of consumer tires to North American vehicle manufacturers to increase by 8 percent to 10 percent, with commercial sales up 6 percent to 8 percent.
It also projects declines in sales of consumer replacement tires of 2 percent to 3 percent and in commercial replacement tires of 6 percent to 8 percent.
It expects full-year original-equipment and replacement tire sales in Europe to decline by up to 10 percent.
Goodyear said it is expanding a cost-cutting initiative after achieving its $1 billion cost-savings target ahead of schedule.
The company said it expects to exceed its 2013 North American operating income target of $450 million a year in advance, and reiterated its 2013 target of $1.6 billion in combined operating income for its four key regions.
In addition, Goodyear is reducing capital expenditure this year to less than $1.1 billion and may cut spending further in 2013.
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