Goodyear Tyre & Rubber Co. will restate its results for periods dating back to 1998, citing errors in inter-company billing systems and mistakes stemming from the introduction of a new computerised accounting system in 1999, Reuters reported.
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The tyre maker said it was restating results for the five years stretching from 1998 to 2002 and for the first and second quarters of this year, slashing net income by up to $US100 million over those periods, the report said.
Reuters noted that the restatement comes as the Akron, Ohio-based company works to cut costs and regain its footing after posting a record $1.1 billion loss last year and battling weak consumer demand – the company has also struggled with higher oil prices and has been hurt by marketing miscues and strained relationships with some of its dealers.
Goodyear, which was scheduled to announce quarterly results on Thursday, told Reuters it would instead publish the full third-quarter earnings report by mid-November.
Hit by rising raw material prices and a weak truck market in its North American business, the company said it expected to post a net loss in the range of $90 million to $115 million, or about 51 cents to 66 cents a share, in the third quarter, Reuters added.
The loss includes charges of about $56 million, or 27 cents a share, related to a plant closing and job cuts in North America and Europe which together will eliminate about 1,360 jobs and yield cost savings of $65 million, the report said.
Analysts’ third-quarter estimates had ranged from a loss of 7 cents to a loss of 25 cents, with the average estimate calling for a 16-cent loss, according to Reuters Research, a unit of Reuters Group Plc.
Goodyear had earned $33.7 million, or 20 cents a share, in 2002’s third quarter, helped by several one-time gains, Reuters noted, adding that the company estimated third-quarter revenue will be about $3.9 million, above Wall Street estimates of about $3.8 billion.
Reuters said Goodyear, which presented investors with a turnaround plan earlier this year and has refinanced debt and eliminated its dividend to conserve cash, said the restatement would not affect its net cash position or access to credit facilities.
“We don’t anticipate that this action will negatively impact our turnaround plan in any way,” Goodyear spokesman Keith Price told Reuters.
