Goodyear posts 4Q profit, but misses Street view
AKRON, Ohio (AP) — Goodyear Tire & Rubber Co. returned to profitability in its fourth quarter partly as it sold more higher-priced tires after reporting a loss a year ago that included hefty costs tied to a plant closing.
But its results fell short of Wall Street expectations, and its shares fell more than 7 percent in morning trading Tuesday.
The biggest U.S. tire maker also cautioned that global tire industry growth will be at a slower pace near term than previously predicted due to economic difficulties in several markets.
For the period ended Dec. 31, Goodyear reported net income of $18 million, or 7 cents per share. That compares with a net loss of $177 million, or 73 cents per share, a year ago.
Excluding one-time items in the latest period, Goodyear said that its earnings were 3 cents per share. Analysts expected earnings of 20 cents per share, according to a FactSet survey.
The prior-year period included a $160 million charge tied to its plans to close a plant in Union City, Tenn.
Quarterly revenue increased 12 percent to $5.68 billion from $5.07 billion partly on higher tire prices, but tire unit volumes dropped 5 percent on difficulties in Latin America, flooding in Thailand and declining replacement industry volumes in mature markets.
The revenue performance missed Wall Street's estimate of $5.86 billion.
Goodyear said that revenue per tire rose 19 percent for the quarter, taking out the effects of foreign currency translation.
A focus on high-end tires helped Goodyear increase revenue per tire by 17 percent for 2011.
"Our price-mix strategy was critical to our ability to offset record high raw material costs and the success of that strategy continued through the end of the year," chairman and CEO Richard Kramer told analysts in a conference call.
Its shares fell $1, or 7.2 percent, to $12.97 in morning trading. Its shares are still up 52 percent from their 52-week low of $8.53 in early October. They peaked for the year at $18.83 in early May.
For the year, Goodyear reported net income of $321 million, or $1.26 per share. In the previous year it lost $216 million, or 89 cents per share.
The Akron, Ohio company's annual revenue rose 21 percent to $22.77 billion from $18.83 billion.