Goodyeawr 4Q report released
Posted: Tuesday, February 19, 2013 12:00 am
By: THOMAS J. SHEERAN Associated Press
By THOMAS J. SHEERAN
CLEVELAND (AP) — Goodyear easily topped Wall Street expectations for the fourth quarter, but shares slid last week with Europe dragging down the tire maker’s outlook for 2013.
The Akron, Ohio, company cut its full-year outlook for 2013 segment operating income from $1.6 billion, to between $1.4 billion and $1.5 billion.
The company broke even for the quarter, compared with net income of $18 million, or 7 cents per share, during the same period last year.
Revenue was $5 billion, down from $5.7 billion last year as a sluggish European economy led to a 16 percent drop in sales for the region.
Excluding charges, Goodyear earned 39 cents per share.
Analysts surveyed by FactSet expected fourth-quarter earnings of 20 cents per share, excluding charges, on $5.34 billion in revenue.
For the year, Goodyear earned $183 million, or 74 cents per share, on revenue of $21 billion, down from 2011 net income of $321 million.
The company, in a move similar to its strategy in North America, said it will cut about 6 million tire units of high-cost capacity in Europe.
The measure should result in about $75 million in annual profit improvement, Goodyear said.
Over the next three years, Goodyear’s Europe-Middle East-Africa unit will look to shore up its long-term competitive position in the region by expanding in emerging markets, including eastern Europe.
In the October-December quarter, Goodyear sold 15 percent fewer tires in the region, with replacement tire shipments down 17 percent.
Chairman and CEO Richard Kramer made his case for a European turnaround in a conference call with analysts.
“The successful execution of our transformation in North America is proof positive that we know how to do this,” Kramer said.
North American results were aided by lower raw material costs and savings from the shutdown of Goodyear’s high-cost Union City plant.
2013 full-year outlook, fourth quarter report, Goodyear