USA: Goodyear Tyre Q1 loss deepens by $17 million year on year
The Goodyear Tyre & Rubber Company today reported a net loss of $US63.2 million (39 cents per share) for the first quarter of 2002 compared with a net loss of $46.7 million (30 cents per share) for Q1 2001.
Q1 2002 results include a pre-tax charge of $10 million (four cents per share) principally related to the return of inventory to Goodyear following the recent closure of Penske Automotive Centres in the United States.
The 2002 first quarter was also adversely affected by approximately $95 million in costs resulting from significant production cutbacks in the fourth quarter of 2001 due to inventory reduction programmes and lower demand during that period.
The 2002 results were also negatively impacted by $13 million in foreign currency exchange, primarily due to currency devaluation in Argentina.
Results for the 2001 quarter included after-tax rationalisation charges of $57.1 million (36 cents per share) and an after-tax gain of $13.9 million (nine cents per share) resulting from the sale of land and buildings in the United Kingdom. Excluding these adjustments, Goodyear posted a loss of $3.5 million (2 cents per share) in the year-ago quarter.
"Ongoing industry weakness in retail tyre demand in North America and other key markets had a negative impact on our first quarter results," said Goodyear's chairman and CEO Sam G. Gibara.
"While I am disappointed in reporting a loss, we expect to make progress in the second quarter. Our commitment to cash generation continues to remain a priority. Goodyear's working capital requirements at the end of the first quarter were over $1 billion below comparable levels a year ago," Gibara added.
Worldwide, Goodyear's first quarter sales were down three percent to $3.3 billion in 2002 from $3.4 billion in 2001.
Tyre unit volume in 2002's first quarter was 53 million units, an increase of 0.3 million, or 0.7 percent, from the 2001 period.
The company estimates that the effects of currency movements reduced sales by approximately $95 million and operating income by $15 million in the 2002 quarter.
Capital expenditures in 2002's first quarter were $75.8 million, down from $103.9 million in the 2001 period.
Depreciation and amortisation expense in 2002's first quarter was $146.8 million compared with $160.4 million in 2001.