Goodyear 2Q profit increases 18 percent behind demand for replacement tires

Goodyear Tire's second-quarter earnings jumped 18 percent to $213 million, though revenue was softer than many had expected and volume slowed in Latin America.

Shares slid 6 percent Wednesday.

Overall tire sales rose 3 percent thanks to strong demand for replacement tires, the company said.

The Akron tire maker's profits added up to 76 cents per share in the three months that ended June 30. That was up from $181 million, or 67 cents per share, in the same quarter a year earlier.

Adjusted earnings of 80 cents per share matched Wall Street estimates, according to a poll by Zacks Investment Research.

"We delivered record second quarter results, driven by strong consumer replacement volumes in all of our regions where our new products are in demand," said Chairman and CEO Richard Kramer.

Yet revenue dropped 5 percent to $4.66 billion from $4.89 billion in the same quarter a year earlier, and missed Wall Street forecasts. Analysts expected $4.74 billion, according to Zacks.

Sales in North America fell 7 percent to $2 billion for the quarter despite a 2 percent jump in earnings, to $208 million.

The overall number of tires sold in North America rose to 15.3 million, from 14.8 million, the company said. But third-party chemical sales fell as raw material costs rose, the company said.

In Latin America, sales dropped 8 percent to $489 million in the quarter while sales in Europe, Africa and the Middle East were up slightly to $1.6 billion.

For the six-month period, Goodyear earned $155 million, or 58 cents per share, on revenues of $9.1 billion, compared with six-month 2013 earnings of $206 million, or 79 cents per share, on revenues of $9.7 billion.

Tire sales rose 2 percent over the first six months of this year. Demand for replacement tires offset a drop in original equipment sales, the company said.

Goodyear shares have increased $3.80, or 16 percent, to $27.65 since the beginning of the year, while the Standard & Poor's 500 index has risen 6.6 percent. The stock has climbed $9.09, or 49 percent, in the last 12 months.

In midday trading, shares of Goodyear Tire & Rubber Co. fell $1.70 to $25.89.