AKRON, Ohio – Goodyear Tire & Rubber Co. said Monday its third-quarter earnings dropped sharply from a year ago, when it got a $517 million one-time lift from the sale of its Engineered Products unit.
But the company squeezed more profit per-tire while selling fewer and beat Wall Street's earnings expectations.
Its shares climbed 15.5 percent in morning trading.
Goodyear said it earned $31 million, or 13 cents per share, for the three months ended Sept. 30, down from $668 million, or $2.75 per share, a year ago.
Its sales rose to $5.2 billion in the third quarter from sales of $5.1 billion.
The latest earnings work out to 43 cents before one-time items, beating the 33 cents a share forecast by Wall Street analysts whose estimates typically exclude charges.
For the first nine months of the year, Goodyear earned $253 million, or $1.04 per share, on sales of $15.4 billion, down from nine-month 2007 earnings of $550 million, or $2.44 per share, on sales of $14.5 billion.
Third-quarter income from continuing operations was $31 million, or 13 cents per share, compared to $159 million or 67 cents for the same period last year.
Goodyear sold fewer tires but on average earned more for each one, as a better mix of expensive high-end tires offset increased costs for raw materials.
Revenue per tire, excluding foreign currency issues, increased 8 percent over the 2007 quarter.
While net sales increased 2 percent, the number of tires sold declined 12.4 percent as car manufacturing slowed and higher gas prices meant less driving and fewer tire replacements.
"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," said Robert J. Keegan, chairman and chief executive officer.
Third-quarter charges included items related to closing of plants and some retail outlets and health-care trust expenses.
Goodyear shares rose $1.38 to $10.30 in morning trading. They have traded in a 52-week range of $7.75 to $30.79.