US: Hurricane costs hit Goodyear Q4 result
The Goodyear Tire & Rubber Company on Thursday reported a net loss of US$51 million (29 cents per share) for the 2005 fourth quarter, including a $78 million (44 cents per share) after-tax loss on asset sales.
Still the tyre maker said it had a good year, citing record sales for fourth quarter and full year 2005 net income that nearly doubled to $228 million ($1.16 per share), compared to $115 million (63 cents per share) in 2004.
Sales for 2005 hit a record $19.7 billion, a 7% increase over $18.4 billion in 2004. Segment operating income was almost $1.2 billion, up 23% on $946 million in 2004.
Full-year 2005 results included a $15 million fourth quarter southern US hurricane cost impact as well as $10 million recorded in the third quarter.
Goodyear reported sales of $4.9 billion in the fourth quarter of 2005.
Q4 segment operating income was $226 million, including the hurricane costs, and compared to $238 million in the same 2004 quarter.
Raw material costs increased 13%, or $160 million. Improvements in price and mix of approximately $190 million, however, more than offset these cost increases.
The company reported net income of $125 million (62 cents per share) for Q4 as it benefited from an after-tax insurance settlement of $157 million (75 cents per share).
"While escalating raw material costs and currency fluctuations will continue to challenge our business, our fundamentals remain sound. We believe the impact of our innovative new products, together with intensified efforts to reduce costs and improve our mix, gives us a solid foundation to continue our turnaround," Goodyear said in a statement.
It is reducing its working capital requirements and made production adjustments during the last quarter to reduce global tyre inventories, particularly in Europe and Latin America. Inventories were down about two million units from the third quarter of 2005 and more than 600,000 units from a year ago.