UPDATE 1-Goodyear quarterly profit rises 34 percent


(Adds North American and international results, background)

DETROIT, July 31 (Reuters) - Goodyear Tire & Rubber Co posted a 34 percent rise in quarterly earnings Thursday as strength in its international operations overcame pressure from the downturn in the North American auto market.

Goodyear, the largest U.S. tire maker, said its focus on selling a higher percentage of more expensive tires, and price increases, more than offset a rise in raw materials costs.

Second-quarter net income rose to $75 million, or 31 cents per share, from $56 million, or 26 cents per share, a year earlier. Revenue rose 6.5 percent to $5.24 billion.

Excluding one-time items, Goodyear reported earnings of 66 cents per share from continuing operations. Analysts' average forecast was 60 cents, according to Reuters Estimates.

Goodyear told investors in June that it would expand in key markets over the next several years and aims to have half of its tire production in lower-cost manufacturing countries by 2012.

In North American Tire, Goodyear's biggest unit, second-quarter operating earnings fell by more than half to $24 million and sales fell 6.4 percent to $2.13 billion as demand softened from car makers and the low end of the replacement tire market.

Collectively, sales rose 18 percent in Goodyear's international operations, and operating income rose 19 percent.

Goodyear shares closed at $19.56 Wednesday on the New York Stock Exchange. The shares fell 31 percent in the second quarter and in mid-July the stock fell as low as $15.57, its worst level since November 2006. (Reporting by David Bailey; editing by John Wallace)



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