CLEVELAND - The Goodyear Tire & Rubber Co. posted a profit for the third quarter on a 22 per cent rise in revenue Friday as its strategy of promoting high-end tires paid off even as the number of tires it sold was unchanged.
The Akron, Ohio-based company, the biggest U.S. tire maker and third largest globally, said its revenue was the highest for any quarter in its history.
Its shares climbed $1.07, or 7.5 per cent, to $15.22 in morning trading. The shares are up 78 per cent from their 52-week low of $8.53 early this month. They peaked May 10 at a high for the past year of $18.83.
Goodyear reported net income of $161 million, or 60 cents per share, in the three months ended Sept. 30. It lost $20 million, or 8 cents a share, in the same quarter a year ago.
Excluding one-time items, the company earned 72 cents per share. That beat the average analyst forecast of 23 cents per share, according to a survey by FactSet.
Goodyear took a charge of 13 cents per share related to the shutdown earlier this year of its Union City, Tennessee, plant, which employed about 1,800.
Revenue rose to $6.1 billion from $5 billion a year ago. Analysts expected $6.26 billion.
Revenue was up 18 per cent in North American, 31 per cent in Goodyear's Europe-Middle East-Africa region, 14 per cent in Latin America and 21 per cent in Asia-Pacific.
"Our teams did an excellent job offsetting higher raw material costs with improved price/mix and selling new, innovative products in targeted market segments," Richard J. Kramer, chairman and CEO, said in a statement.
He told analysts in a conference call that the earnings came despite flat numbers of tires sold — 47.7 million.
"Our third-quarter performance was delivered on flat volumes reflecting somewhat weaker demand but, more importantly, consistent with our selectivity strategy focusing our business on targeted market segments," he said.
For the first nine months of the year, Goodyear reported net income of $303 million, or $1.19 per share, on sales of $17.1 billion. A year ago, it lost $39 million, or 16 cents per share, on sales of $13.8 billion.