Goodyear Swings To 2Q Loss, Beats Analyst Estimates
July 30 2009 - 8:44AM
Dow Jones News
Goodyear Tire & Rubber Co. (GT) swung to a second-quarter
loss of $221 million as the company reduced product shipments in
the wake of auto maker production cuts.
Tire sales fell in all of Goodyear's regions, especially in
North America and Europe which reflected the biggest decline in
auto maker orders. Shipments to North American auto makers dropped
by more than half while Europe declined 33%.
"There is little debate as to the severity of the economic and
industry downturn we have experienced the past three quarters,"
Goodyear Chief Executive Officer Robert Keegan said in a statement
Thursday. "We are beginning to see some signs of economic
stabilization and recovery, although still fragile at this stage
and varied around the globe."
Goodyear, which sidestepped most of the economic problems of
2008 by producing and selling more high-end tires, is now resorting
to more plant closures, job cuts and price increases to traverse
the ongoing worldwide recession. The company cut 5,500 jobs though
June, 500 more than its full-year target.
For the quarter, the Akron, Ohio-based company's net loss was 92
cents a share compared with a profit of $75 million, or 31 cents a
share. Excluding one-time charges, Goodyear reported a loss of 35
cents, beating analyst estimates of a loss of 70 cents a share
according to Thomson Reuters. Sales fell 25% to $3.9 billion.
The one bright spot was the Asia-Pacific region which reported a
record $57 million profit. Much of the profit was attributed to
cost reductions that included the closure of an Australia plant.
The unit also sold tires at higher prices.
Shares of Goodyear, North America's largest tire maker, closed
Wednesday at $13.89 and were down 1% at $13.75 in premarket trading
Thursday. The shares have declined 27.5% over the past 12
months.
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542;
jeff.bennett@dowjones.com