Goodyear Posts 4Q Loss On Strike Costs - - Tyler, Longview, Jacksonville |ETX News


Goodyear Posts 4Q Loss On Strike Costs

(AP) Goodyear Tire & Rubber Co. on Friday reported a $358 million loss in the fourth quarter due to a costly strike at 16 plants that dragged down sales.

In the three months ended Dec. 31, Goodyear reported a loss of $2.02 per share on sales of $4.98 billion. Goodyear reported a $51 million loss, or 29 cents a share, on sales of $4.94 billion in the 2005 fourth quarter.

Goodyear placed the cost of the strike at $367 million, or $2.07 per share.

More than 14,000 Goodyear workers went on a nearly three-month strike that began Oct. 5 against the world's third largest tire manufacturer. The strikers returned to work Jan. 2.

The slight increase in sales in the 2006 fourth quarter was due mostly to higher prices in Goodyear's international tire businesses.

Aside from the strike's effect, Goodyear earned 5 cents per share. But the company also listed charges amounting to $1.03 per share tied to plant closings. It also had a gain of 86 cents per share from a favorable conclusion to a tax dispute in Germany.

The net result from operations, excluding special charges, was a profit of 22 cents per share.

Analysts in a Thomson Financial survey on average expected a loss of 40 cents per share, although the strike may been the cause of an unusually wide array of expectations.

Sales at Goodyear's North American tire segment were $2.1 billion in the fourth quarter, compared with $2.3 billion in the 2005 quarter. The company estimates the strike reduced North American sales volume by 2.8 million tires and sales by $318 million.

Goodyear's revenue for the quarter rose despite an 8 percent decline in tire sales volume, principally due to the strike and its effort to get out of private label tire businesses. The company estimated it lost $363 million in sales.

"We made outstanding progress in several key focus areas in 2006, in spite of the challenges from the strike, high raw material costs and difficult market dynamics," said Robert J. Keegan, chairman and chief executive.

For 2006, Goodyear lost $330 million, or $1.86 per share, compared with net income of $228 million, or $1.16 per share, in 2005.

Goodyear's net sales for 2006 rose 3 percent to $20.26 billion, from $19.72 billion in 2005, despite a 5 percent decline in tire sales.

The effect of no longer having some operations sold in 2005 reduced full-year 2006 sales by approximately $265 million, tire volume by 1.1 million tires and segment operating income by $34 million.

Goodyear shares, which have been trading at multiyear highs, fell 53 cents, or more than 2 percent, to $24.88 in morning trading on the New York Stock Exchange.

The company manufactures tires, engineered rubber products and chemicals. It operates in 29 countries and employs about 80,000 people.

Powered by Frankly