Goodyear shares sink after reporting fourth-quarter loss | VailDaily.com
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Goodyear shares sink after reporting fourth-quarter loss

M.R. KROPKO

CLEVELAND (AP) Goodyear Tire & Rubber Co. said Thursday it lost $51 million in the fourth quarter as higher raw materials costs, production delays linked to hurricanes and expenses from the sale of its farm tire business took the gleam off improved sales for the nations biggest tire maker. Shares fell nearly 6 percent in afternoon trading.Akron-based Goodyear lost 29 cents per share in the October-December period in contrast to a profit of $125 million, or 62 cents per share, a year earlier. The year-ago period benefited from a gain of 75 cents per share from an insurance settlement.Sales edged up 2 percent to $4.93 billion from $4.83 billion.In an interview, Goodyears top executive said the company is solid and on a continuing path of recovery despite the loss.Ive talked about this being a series of speed bumps that are surmountable, Robert J. Keegan, chairman and chief executive, told The Associated Press. I meant that. Thats how we feel about it.Earlier in the day, he had said in a statement the impact of our innovative new products, together with intensified efforts to reduce costs and improve our mix, gives us a solid foundation to continue our turnaround.Goodyear said its results included a slew of extra costs, including $21 million in hurricane-related expenses that reduced earnings by 12 cents per share. In addition, it had a loss on an asset sale of 44 cents and charges totaling 10 cents per share.The added costs were somewhat offset by 24 cents a share in favorable tax adjustments, settlements with suppliers and income from prior periods, the company said.It reported operating income of $226 million, brought down $15 million by hurricane-related distribution costs along the Gulf Coast, for the quarter compared with $238 million in 2004.Sales in North America rose 4 percent, as increased prices offset lower volume. Although sales declined in the European Union, that decrease was countered by increases in Asia and Latin America.Raw material costs increased 13 percent, or $160 million.On Jan. 30, Goodyear warned its fourth-quarter profit would be hurt by higher-than-expected costs for raw materials. Hurricanes hurt raw materials suppliers of carbon black and synthetic rubber in the Gulf Coast area. Carbon black is a filler used to improve tire durability.On Dec. 28, Goodyear completed the sale of its North American farm tire assets to Titan Tire Corp., a subsidiary of Titan International Inc.Goodyear received $100 million from Titan for the assets, but it took charges in the quarter for employee pension and post-retirement medical plans. That sale reduces revenue in Goodyears North American Tire segment by about $200 million annually, but will eliminate the need for further investment in the farm tire business to improve the segments profitability.For the full year, Goodyears earnings surged to $228 million, or $1.16 per share, from 2004s profit of $115 million, or 63 cents per share. Annual sales grew 8 percent to $19.72 billion from $18.35 billion.Goodyear shares fell 92 cents to $14.52 in afternoon trading on the New York Stock Exchange, where they have traded in a 52-week range of $11.24 to $19.31.Goodyear employs about 85,000 people worldwide and makes tires, engineered rubber products and chemicals in 28 countries.Vail, Colorado


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