Goodyear Previews Second Quarter Earnings

Goodyear Tire & Rubber Company has announced that it expects to report second quarter sales of around $4.5 billion. The figure represents a $0.7 million dollar improvement on the previous year, which the company believes are the result of higher volume output, improved pricing and better product mix.

Goodyear also sees the consolidation of two of its subsidiaries, and the favourable impact of current exchange rates, as important factors.
The company reports that all seven of its businesses expect to report positive operating income in the second quarter. Goodyear’s two European business units are believed to have improved by 25 per cent. The company’s Latin America, engineered products wing is said to be up by at least 50 per cent compared with the same period a year ago.

Chairman and CEO, Robert J. Keegan, was pleased, but realistic about the results. “Our second quarter results will reflect higher sales in all of our businesses and the impact of our turnaround initiatives. While we are pleased with our year-to-date operating results, challenges remain, including high levels of debt and un-funded pension obligations, which we are addressing with specific strategies.”

The company also announced that it intends to refinance its $680 million senior secured US revolving credit facility, which matures on 30 April, 2005. The new $500 million senior secured funded credit facility, which Goodyear expects to mature in 2007, will be secured by the same collateral as the credit facility it replaces.
Goodyear also indicated that, after exploring the possibility of selling its chemical business, it has determined that the business remains more valuable to the company if retained than if sold.

Goodyear will report full second quarter financial results on Thursday, 5 August.