UPDATE 2-Goodyear revenue lower, shares drop
Oct 29 (Reuters) - Goodyear Tire & Rubber Co, the biggest U.S. tire maker, on Tuesday reported a 5 percent drop in quarterly revenue, missing analysts' expectations and sending the company's shares down 7 percent in mid-morning trading.
Goodyear said lower third-party chemical sales in North America and unfavorable foreign currency translation more than offset a modest increase in global tire sales.
Third-quarter net income available to common shareholders was $166 million, or 62 cents per share, up 50 percent from $110 million, or 41 cents per share.
Total revenue in the quarter ended Sept. 30 fell to $5.0 billion from $5.26 billion a year earlier.
All four regional business units reported higher operating income, but revenues fell more than 9 percent in North America and Asia-Pacific, Goodyear said.
Chief Executive Richard Kramer said the company expects segment operating income for the full year to exceed $1.5 billion, up slightly from earlier projections, and continues to target 10 percent to 15 percent growth from 2014 through 2016.
Global tire sales volume in the quarter rose 2 percent, to 42.6 million, adding $82 million in revenue.
Goodyear said tire sales to vehicle manufacturers rose in North America, Europe and Asia-Pacific, but declined in Latin America.
In North America, which accounts for 37 percent of the company's global tire volume and 47 percent of revenue, sales dropped to $2.2 million, but operating income was a record $161 million.
Goodyear improved revenue, operating income and margins in its Europe, Middle East and Africa businesses. But Chief Financial Officer Darren Wells, in a conference call with analysts, said "economic headwinds in the region remain."
Goodyear shares were down $1.61 at $20.44 in morning trading. They had doubled in the 12 months to Monday's close, outperforming the S&P 500 index.