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Goodyear earnings fall
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April 21, 1999: 10:19 a.m. ET
Tire maker earns 90 cents a share excluding charges, matching forecasts
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NEW YORK (CNNfn) - Goodyear Tire & Rubber Co. Wednesday reported lower earnings that matched Wall Street forecasts and set 1,400 more job cuts than the 2,800 announced in February.
Goodyear, whose venture with Japan's Sumitomo Rubber Industries will make it the world's biggest tire maker, said it earned $141 million, or 90 cents a diluted share, in the quarter, excluding a $167 million restructuring charge, compared with profits of $174 million, or $1.09 a share, a year earlier. Analysts had forecast profits of 90 cents a share excluding charges, according to First Call, which tracks earnings estimates.
Goodyear (GT) stock, one of 30 in the Dow Jones industrial average, rose 1/2 to 57-3/8 in early trading.
Goodyear, currently the No. 3 tire maker, cut production and streamlined operations during the quarter to cope with sluggish demand overseas. When it announced its venture with Sumitomo in February, the Akron, Ohio-based Goodyear said it would cut 2,800 jobs, or about 3 percent of its work force worldwide, and take restructuring charges of up to $150 million.
Since then, it decided to move a bit more aggressively in its restructuring, spokesman Keith Price said. He said additional job cuts would come at a Freeport, Ill., plant that makes older "bias-ply" tires, little used compared with radial tires in the United States, as well as at the Gasden, Ala., plant that Goodyear targeted for cuts in February. The Gasden plant is one of Goodyear's oldest plants in the United States.
The moves come as Goodyear, battling stiff competition from Michelin of France and Japan's Bridgestone, tries to invigorate sluggish sales and earnings.
Including the restructuring charge, equal to $116 million, or 74 cents a share after taxes, Goodyear's net income fell to $25 million, or 16 cents a diluted share, from $177 million, or $1.11 a share, in the 1998 quarter.
Sales fell to $3 billion from $3.1 billion.
Earnings from its tire operations declined in North America, Latin America and Europe but edged higher in Asia. Profit margins, or gross profits as a percentage of sales, fell in all regions except Asia, where they were flat.
Sales and profits in chemicals and other products also dropped during the quarter, Goodyear said.
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Goodyear
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