Following yesterday’s announcement that the company had sustained fourth quarter net losses of $1.37 per share and that net revenues had also fallen 19.9 per cent year-on-year to $4.1 billion, Goodyear’s full year results for 2008 revealed the extent to which the fourth quarter was down on 2007, showing a mere 1 per cent drop from the previous year’s record sales of $19.6 billion. The manufacturer also reported that it had seen increases in Goodyear-branded market share. However, the company’s statement on the figures took the opportunity to announce Goodyear’s plans to freeze salaries, cut an additional 5,000 jobs – though it is yet to be decided which markets will see these job losses – and sell non-core assets in an effort to cut costs and operating expenses by $700 million during 2009 fiscal year.

Reacting to the news, an analyst report from Deutsche Bank reported “positive signs” from the results, saying that the Q4 loss could be viewed as “a respectable result considering that global volume
(-19 vs. our -10.5 per cent estimate) and overhead under-absorption (-$213MM vs. our -$144MM estimate) deviated negatively against our assumptions.” Countering the 19 per cent drop in global volume, which Deutsche’s report called “a bit unsettling,” was the bank’s long-term prediction that shows Goodyear making a 54 cent profit per share in 2009 and $2 in 2010. It backed up these estimates by pointing towards the acceleration of “the bottom-line benefit of fixed-cost reduction” in 2009; the reduction of tyre companies’ capacity in general, leading to better “price discipline”; and that Deutsche analysts believe “tyre companies, including
Goodyear, are poised for a pretty big improvement in gross margins in the back half, as they benefit from plummeting raw material costs.”