AKRON Goodyear to restate earnings to fix accounting mistakes

Goodyear blames a billing system installed in 1999 for an accounting error.
AKRON (AP) -- Goodyear Tire & amp; Rubber Co., the nation's largest tire maker, will restate earnings for the past five years because of accounting system errors.
The restatement is expected to decrease income by as much as $100 million, according to Goodyear, which also said it would delay today's scheduled release of its third-quarter earnings until at least mid-November.
Shares closed up 2 cents to $6.83 on the New York Stock Exchange before Wednesday's announcement, but in after-hours trading, shares plummeted 27 percent, or $1.83.
In a statement after the market closed, Goodyear said an accounting system implemented in 1999 caused errors with its in-house billing system, resulting in mistakes it is now identifying and correcting.
The accounting system was used to track the purchase of equipment for factories, Goodyear spokesman Keith Price said. The company had no further details other than what was in the statement, he said, declining to reveal when the errors were discovered.
Accounting entry errors also were involved, according to Price, who said he could not confirm whether someone had simply "punched in the wrong numbers." Price said he was restricted in what he could say.
Goodyear moved quickly to disclose and correct the problems, he said. The accounting errors do not affect the company's cash flow or access to credit, Goodyear said.
Goodyear said it's still reviewing the mistakes, but as of now, income reported from 1998 through 2002 is expected to be lowered by as much as $100 million. The erroneous system also affected results for the first half of 2003.
The loss of $236.9 million, or $1.35 a share, previously reported for the first half of this year is expected to improve, Goodyear said. The company said the improvement was because charges previously recognized during the first half of 2003 will be reflected in the restatement for prior years.
Losses expected
Goodyear said it expected a loss in the quarter that ended Sept. 30 of between $90 million to $115 million, or 51 cents to 66 cents per share. The loss includes charges related to a plant closing and 1,360 layoffs in North America and Europe.
Analysts surveyed by Thomson First Call had expected a loss of 14 cents a share, excluding the charges.
The company expects to report sales of about $3.9 billion for the quarter.