Goodyear has posted posted a strong set of fourth quarter financial results that have cheered investors as the share price surged in early trading.

The company reported record fourth quarter segment operating income of USD419m, up 54% and record full year segment operating income of USD1.6bn, up 27%. North America set an earnings records for the fourth quarter and the full year. North American operating profit jumped 72% to USD199m in the fourth quarter, with operating margin up to 9.3% from 5% a year earlier.

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“Our outstanding fourth quarter and full year earnings confirm that our strategy is working and demonstrate Goodyear’s ability to deliver sustainable earnings growth and strong free cash flow,” said Richard J. Kramer, chairman and chief executive officer. “Our North America business achieved record earnings in all four quarters of 2013.”

Goodyear said it has taken steps to fully fund its hourly US pension plans with USD1.15bn of available cash balances and has begun the process to freeze and de-risk the plans.

“Our 2013 performance has given us the confidence to fully fund our hourly U.S. pension plans,” Kramer said. “This is a major milestone in our history and will provide greater transparency to our underlying tire business while improving earnings and cash flow. Moving past these legacy obligations is a new beginning for our company.”

The strong Q4 profit was achieved in spite of a slump in overall sales. Goodyear’s fourth quarter 2013 sales were USD4.8bn, down 5% from the year ago quarter. Fourth quarter 2013 sales reflect USD64m in higher tyre unit volumes; USD178m in lower sales in other tyre related businesses, most notably third party chemical sales in North America; USD36m in lower price/mix, principally due to lower raw material costs; and USD102m in unfavourable foreign currency translation. Tyre unit volumes totalled 40.7m, up 2% from the fourth quarter of 2012.

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“As industry volumes recover, we continue to see mixed growth rates globally, but there is strong growth in the high-value-added segments we are targeting,” Kramer said. “We remain disciplined in our approach, seeking growth where our brands and value proposition enhance our profitability.”

Goodyear’s 2013 net income available to common shareholders was up to USD600m from USD183m in 2012.