Shares in Goodyear plunged in early trading Friday after the Akron tire maker reported fourth-quarter results that fell short of analyst expectations.
Goodyear had net income of $110 million, or 47 cents per share, on revenue of $3.9 billion for the fourth quarter ending Dec. 31. That compares to a loss of $96 million, or 39 cents per share, on revenue of $4.1 billion a year ago.
The company had fourth-quarter adjusted net income of $120 million, or 51 cents per share, compared to $245 million, or 99 cents per share, a year ago.
Both earnings and revenue fell short of analyst expectations. Goodyear said revenue was down largely because of foreign currency translation and lower tire sales.
Shares closed down $1.69 or 9.1 percent, to $18.69. Shares over the past 52 weeks traded from a low $18.49, hit Friday morning, to a high of $31.79.
Richard J. Kramer, chairman, chief executive officer and president, told industry analysts in a conference call that he was not satisfied with Goodyear’s overall performance in 2018.
“Our higher raw materials, strong U.S. dollar and industry volatility in China negatively impacted our results,” Kramer said.
He said the company’s operational execution was below his expectations.
“The realities of today's challenging macro backdrop mean that we need to intensify our focus on factors that we can control including our expenses and cash flows,” Kramer said. “However, it's also important to ensure that we are running the business for the long term.”
While the company’s finances fell below expectations, Kramer said Goodyear was excelling in other areas despite operating in a challenging environment.
“Our teams delivered several operational wins in 2018, including increasing our consumer replacement volume and building our [original equipment] pipeline by securing numerous fitments, notably on future electric vehicles,” Kramer said in a news release.
Goodyear had fourth-quarter tire sales of 40.7 million, down 3 percent from 42 million a year ago.
Replacement tire shipments were nearly flat compared with a year ago. Original equipment tire volume fell 10 percent, mainly because of lower automotive production in China and India, the company said.
For the full year, Goodyear reported net income of $693 million, or $2.89 a share, on revenue of $15.475 billion. That compares to net income of $346 million, or $1.37 a share, on revenue of $15.377 billion in 2017.
Goodyear’s 2018 adjusted net income of $555 million, or $2.32 per share, was down from $790 million or $3.12 per share in 2017.
For the full year, tire unit volume totaled 159.2 million, unchanged from 2017. Goodyear said full-year replacement tire volume was up 1 percent while original equipment tire volume was down 4 percent.
Goodyear’s Americas unit, which combines North and South American markets, reported lower fourth-quarter and full-year results compared to a year ago.
Tire unit sales in the fourth quarter totaled 19.1 million, down from 19.5 million for the 2017 fourth quarter. Fourth quarter sales were $2.1 billion, down from $2.2 billion a year ago.
Segment operating income for the quarter was $179 million, down from $217 million for the fourth quarter of 2017.
The Americas segment sold 70.9 million tires for the year, the same as in 2017.
Full-year Americas segment revenue came in at $8.16 billion, down from $8.21 billion in 2017.
The Americas segment had full-year operating income of $654 million, down from $847 million in 2017.
Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or email@example.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ.