Goodyear, with strong fourth-quarter results in North America, earns $228M, beats estimate
CLEVELAND - Strong fourth-quarter results in Goodyear Tire & Rubber Co.'s core North American market helped the tire maker beat Wall Street estimates Thursday.
With car sales increasing, the number of tires sold to auto makers in North America rose 7 per cent in the fourth quarter over the same period in 2012. Replacement tire shipments increased 1 per cent.
The number of tires sold worldwide increased 2 per cent to 40.7 million.
Goodyear also announced it fully funded its hourly pension fund with a $1.15 billion cash payment, ending more than a decade of dealing with the issue.
Goodyear shares rose 10 per cent in midday trading.
The Akron-based company said it earned $228 million, or 84 cents per share, on sales of $4.8 billion. After one-time charges, Goodyear earned 74 cents, beating the Wall Street estimate of 65 cents.
Revenue missed the estimate of $4.98 billion and was off 5 per cent from the fourth quarter of 2012, hurt by lower third-party chemical sales in North America and foreign currency issues.
The company had broken even on sales of $5 billion in the last quarter of 2012.
In the most recent quarter, Goodyear's North American segment operating income rose 72 per cent to $199 million.
For the full year, Goodyear earned $600 million, or $2.28 per share, on sales of $19.5 billion, up from 2012 earnings of $183 million, or 74 cents per share, on sales of $20.9 billion.
With a new labour agreement, Goodyear said it has halted production at an Amiens, France, factory with a contentious past and will close it by March.
Last month protesting workers reached an agreement to end years of standoff, with Goodyear providing improved indemnities for employees who are let go.
Workers seized the plant's director and human resources chief for two days in early January to demand bigger severance packages. The managers were released after police intervened.
Chairman and CEO Richard Kramer said the pension fund payment would free up the company to become more competitive.
"For more than a decade we have been dealing with volatility associated with legacy obligations," he said in a conference call with analysts.
"With our legacy obligations essentially behind us, we can devote 100 per cent of our efforts to creating competitive advantage."
Its shares rose $2.58, or 10.7 per cent, to $26.75 in midday trading. Its shares have risen more than 90 per cent so far this year.
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