April 26, 2008 in Business

Company news: First-quarter profit reports a mixed bag

From Wire Reports The Spokesman-Review
 

Goodyear Tire & Rubber Co. said Friday that it swung to a profit in the first quarter by focusing on higher-priced tires and strong international markets. But the company says it will cut tire production in North America, where sales have been sluggish.

The results from Goodyear, the world’s third-largest tiremaker and No. 1 in the U.S., beat Wall Street expectations and its shares rose 6 percent.

Goodyear said it earned $147 million, or 60 cents per share, in the quarter that ended March 31, compared with a loss of $174 million, or 96 cents per share, in the same period in 2007. Sales rose to $4.94 billion from $4.5 billion a year ago.

Excluding one-time charges, Goodyear earned 67 cents per share from continuing operations.

Chairman and chief executive Robert J. Keegan said the results demonstrate success in emphasizing higher-margin premium product lines, reducing costs and paying down debt.

In other first-quarter earnings reported Friday:

Honda Motor Co. saw its profit slashed due to a tax dispute and Mitsubishi Motors Corp. racked up costs for closing an Australian plant. But Mazda Motor Corp. – the smallest of Japan’s five biggest automakers – emerged unscathed to report booming profits.

Honda’s quarterly net profit plunged 86 percent compared with the same period a year ago because of a corporate tax levied on its Chinese joint venture, at 25.4 billion yen ($244.2 million). Quarterly sales edged down 1 percent to 3.056 trillion yen ($29.4 billion).

Meanwhile, Mitsubishi’s profit during the same period dropped 37 percent, despite a 12 percent rise in quarterly sales, to 734.8 billion yen ($7.07 billion).

Mazda was an exception, reporting a 48 percent jump in profit on strong overseas sales on way to a record annual profit. The Japanese affiliate of Ford Motor Co. reported a 46.8 billion yen ($450 million) profit for the quarter through March, and a rise in quarterly sales of 1.2 percent to 969.5 billion yen ($9.3 billion), partly on strong demand for the Mazda 6 in Europe.

“Japan’s Toshiba Corp. said Friday its net profit plummeted a staggering 95 percent in the January-March quarter due to losses related to its exit from next-generation video HD DVD business.

Toshiba’s net profit stood at 1.25 billion yen ($12 million), down sharply from 26.17 billion yen a year earlier.

Toshiba announced the end of its HD DVD business in February. The technology had been competing against Blu-ray disc technology, backed by Sony Corp., Matsushita Electric Industrial Co. – which makes Panasonic brand products – five major Hollywood movie studios and others.

“Swedish truck maker Volvo AB said Friday that first-quarter profit rose 12 percent as higher sales in Europe and Asia more than offset weak demand in the United States.

Volvo boosted its forecast for the European market for heavy trucks, saying it will grow by 10 percent this year, but maintained its estimate that the North American market would stay flat compared with 2007.

The world’s No. 2 truck maker said net profit for the January to March period was 4.21 billion kronor ($708 million), up from 3.76 billion kronor in the first quarter of 2007.

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