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Goodyear posts profit
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February 9, 1998: 8:38 p.m. ET
The tire maker, like its radials, trudged through many a storm in '97
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NEW YORK (CNNfn) - Goodyear Tire and Rubber Co. Monday reported higher fourth quarter operating profits, despite weaker sales in Asia and the effects of a stronger dollar.
The Akron, Ohio based tire maker said operating profits rose to $178.3 million, or $1.14 a share in the last three months of the year - in line with consensus analyst estimates. In the year ago quarter, Goodyear reported an operating profit of $164 million, or $1.05 per share.
Including one-time restructuring charges, Goodyear earned $2 million or 1 cent a share in the fourth quarter of 1997 compared with a loss of $408.2 million or $2.63 per share after the effect of an asset writedown and rationalization charges in the year ago period.
Including charges, net income in 1997 was $558.7 million or $3.58 per share compared with 1996 net income of $101.7 million or 66 cents per share. Net income for all of 1996 included charges of $573 million or $3.69 per share.
Goodyear said the strong dollar and stiff competition led to $380 million in reduced sales for the year. But sales overall were $13.16 billion in 1997, compared to $13.11 in the previous year.
In a statement, Chairman and Chief Executive Samir Gibara said Goodyear was forced to cope with lackluster economies in Europe and a 19-day strike at a production facility..
"The economic impact in Asia had a severe impact on our fourth quarter earnings," he said at a news conference Monday.
He added the company, which has derived about 10 percent of its revenues from Asia in the last four years, made up for the Asian losses by increasing sales in other regions.
As a result of the Asian turmoil, Goodyear said it is converting its nine Asian plants to export-only.
Goodyear also said new technologies to make manufacturing more efficient and tires more durable will enable it to almost double its size in five years.
The company said the new technologies will cut production cycles by 70 percent, increase worker productivity by 135 percent and reduce labor input by 35 percent.
The company is also aiming to generate $20 billion to $23 billion in sales within five years.
In heavy trading Monday, Goodyear shares rose 1-11/16 to close at 61-1/4 a share.
-- by staff and wire reports
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Goodyear
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