Goodyear in 2011 had record sales and its first profitable year since 2007.
But at least in part because fourth-quarter finances didn’t meet analyst expectations, stock in the Akron tire maker closed down Tuesday.
Goodyear Tire & Rubber Co. reported net income of $321 million, or $1.32 a share, on record revenue of $22.8 billion for the year. Goodyear lost $216 million on revenue of $18.8 billion in 2010.
For the fourth quarter ending Dec. 31, Goodyear said it had net income of $18 million, or 7 cents a share, on revenue of nearly $5.7 billion. That compares to a loss of $177 million on revenue of nearly $5.1 billion for the fourth quarter of 2010.
While fourth-quarter revenue was up 12 percent from a year ago, industry analysts thought Goodyear would do better — they expected 20 cents in earnings per share and revenue of at least $5.88 billion for the last three months of 2011. Goodyear’s top executive also said the company already is hitting “headwinds” in 2012. Fourth-quarter income was hurt by declines in Goodyear’s Latin American and Asia Pacific tire divisions.
Shares closed down 72 cents, or 5.2 percent, to $13.25. Shares are down 6.5 percent since Jan. 1 and are down 6.6 percent from a year ago.
Goodyear made more financial and operational progress in 2011 than company executives had envisioned, Richard Kramer, chairman and chief executive officer, told industry analysts in a conference call.
“However, as we look ahead to 2012, we already are experiencing more economic and internal headwinds than initially anticipated,” he said.
Kramer said he was pleased with Goodyear’s record sales and operating income in what he said was a challenging economic environment in 2011.
“With full-year segment operating income of nearly $1.4 billion worldwide and $276 million in North American Tire, its best performance since 2000, we made strong progress toward our 2013 targets,” Kramer said in a statement. Goodyear is aiming to have $1.6 billion in what it calls segment operating income in 2013.
“I’m even more encouraged about the improvements made in executing our strategies such as leading innovation, winning in targeted market segments and striving for operational excellence,” Kramer said.
“Frankly, our full year results for 2011 were better than we expected,” he said. “Regardless of the results of one quarter or one year, we’re committed to our long-term strategy.”
Uncertainties this year include the U.S. presidential election, sovereign debt issues in Europe and slower growth in China, he said.
Global tire shipments this year likely will be flat, in line with sales in 2011 and 2010, said Darren Wells, executive vice president and chief financial officer.
Raw materials are expected to cost $500 million more in the current first quarter than a year ago, he said.
Goodyear’s North American Tire Division had its best year since 2000, the company said. North American Tire had annual income of $276 million on revenue of nearly $9.9 billion, compared to income of $18 million on revenue of $8.2 billion a year ago.
For the fourth quarter, North American Tire had operating income of $21 million, up 90.9 percent from $11 million a year ago. Revenue was nearly $2.6 billion, up 17.4 percent from $2.2 billion a year ago. Tire sales fell to 16.6 million units, down 1.8 percent from 16.9 million in the fourth quarter of 2010.
Latin American Tire had operating income of $48 million, down 48.4 percent from $93 million in the fourth quarter of 2010. Revenue was $596 million, up 2.4 percent from $582 million a year ago.
Asian Pacific Tire operating income was $39 million, down 35 percent from $60 million a year ago. Fourth quarter revenue was $591 million, up 5.2 percent from a year ago.
Europe, Middle East and Africa Tire income was $88 million in the quarter, up 10.7 percent from the fourth quarter a year ago. Sales were $1.9 billion, up 10.7 percent from $1.7 billion a year earlier.
Goodyear lost $375 million in 2009 and lost $77 million in 2008. The company had an annual profit of $602 million in 2007. It lost $330 million in 2006, the year its Steelworkers hourly employees went on a multi-week strike.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
