Goodyear Reports Q4 Net Loss Despite Record Sales

Goodyear has reported a fourth quarter net loss of $51 million for 2005, compared with the previous year period’s net income of $125 million. This year’s lower result was put down to losses caused by the sale of the company’s farm tyre unit. Despite the losses the company recorded sales of $4.9 billion in the fourth quarter and a full-year sales record of $19.7 billion. According to the company, sales benefited from improved pricing and product mix and higher volume in the international tyre businesses, while the effect of currency translation reduced sales by approximately $107 million in the quarter.

Goodyear’s net income for 2005 nearly doubled to $228 million, compared to $115 million (63 cents per share) in 2004. Segment operating income from the company’s business segments was almost $1.2 billion, a 23 per cent increase compared to $946 million in 2004. Full-year 2005 results include the previously mentioned fourth quarter hurricane impact as well as $10 million recorded in the third quarter.

“Our company completed another very good year, and I am extremely proud of the progress we made in 2005,” Goodyear chairman and CEO Robert J Keegan said, adding: “Our new product success reflects our commitment to understanding consumer needs and providing them with relevant technology to meet those needs,” he said. “The market has responded positively to our new high-margin tyres such as Assurance and SilentArmor in North America, UltraGrip 7 and RunOnFlat in Europe,” he continued.

An official statement added that Goodyear continues to focus on reducing its working capital requirements and made production adjustments during the quarter to reduce global tyre inventories, particularly in Europe and Latin America. Inventories were down about 2 million units from the third quarter of 2005 and more than 600,000 units from a year ago.

During the fourth quarter, European Union Tire is said to have had higher volume and stronger pricing and product mix, driven by “robust sales” of winter tyres. However sales decreased 4 per cent to $1.169 million. Volume improvements resulted in market share gains in virtually all segments of the consumer replacement market, the company said. The unit sold 64.3 million units in 2005 (2004:62.8 million).