Goodyear posts volume, earnings declines in fourth quarter 2006

Akron, Ohio -- Goodyear´s made five percent fewer tyres in 2006, compared with 2005. Tyre unit volume fell by 10.8 percent in North America. The firm still posted losses in both the fourth quarter and the year despite a 2.7-percent sales gain for the year.

Volume suffered last year because of the United Steelworkers´ strike against 16 North American plants as well as Goodyear´s decision to exit certain segments of the private label tyre business, said the company. Yet sales benefited from improved pricing and product mix in Goodyear´s international businesses.

Goodyear posted record sales for the year of $20 300 million, up from $19 700 million in 2005. But the Akron-based tyre maker posted a net loss of $330 million, compared with earnings of $228 million in 2005.

In North American Tire, Goodyear´s sales essentially were flat for the year at $9090 million. The unit posted a segment operating loss of $233 million, compared with earnings of $167 million in 2005.

For the fourth quarter, Goodyear´s sales rose 0.9 percent to $4980 million though its loss deepened to $358 million from $51 million in the year-earlier period. Goodyear said its tyre unit volume fell 8 percent companywide in the quarter.

The USW´s strike lasted from October through December, in Goodyear´s fourth quarter.

Goodyear said the strike reduced fourth quarter and full-year sales by $363 million and tyre unit volume by 2.8 million units. The strike also cost Goodyear $367 million in net income for the year. The strike reduced North American Tire´s sales by $318 million in the fourth quarter.

Executives pointed to operating improvements outside of the impact of the strike.

"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," Chairman and CEO Robert Keegan said in a statement. "This allowed us to continue to grow our top line and deliver record results in several of our businesses while creating strong business platforms to carry Goodyear´s profitable growth into the future."

From Rubber & Plastics News (A Crain publication)