Goodyear reports profits of $52M in fourth quarter

Goodyear posted sales gains across the globe.

AKRON (AP) — Goodyear Tire & Rubber Co. said Thursday that it swung to a profit in the fourth quarter, earning $52 million on strong U.S. and international sales.

The world’s third biggest tire maker earned 23 cents a share for the quarter ended Dec. 31 compared with a loss of $358 million, or $2.02 per share, in the year-ago quarter when results were results were brought down by a Steelworkers strike at North American factories.

The result beat Wall Street expectations and Goodyear shares rose more than 6 percent.

Discounting charges totaling 26 cents per share and a tax-related gain of 4 cents per share, earnings from continuing operations were 49 cents per share for the quarter.

Analysts surveyed by Thomson Financial expected earnings of 42 cents per share.

Sales in the quarter gained 11 percent to $5.16 billion, versus $4.64 billion a year ago.

Akron-based Goodyear posted double-digit percentage growth in revenue in several international tire markets with its emphasis on high-margin premium tires. The exception was Europe, which had a 5 percent gain. Goodyear reported a 10 percent sales gain in North America.

For the full year, Goodyear earned $602 million, or $2.65 per share, versus a 2006 loss of $330 million, or $1.86 share. Sales in 2007 totaled $19.64 billion, bettering the 2006 result of $18.75 billion.

Goodyear shares rose $1.87, or 7.4 percent, to $27.19 Thursday. The shares have traded within a one-year range of $22.27 and $36.90.

The company has estimated that the 12-week strike reduced fourth-quarter 2006 sales by $318 million.

Goodyear said higher prices and a wider product mix offset lower volume in the fourth quarter caused by weak winter tire demand in Europe and the company’s exit from some of its private label tire business in North America.

Robert J. Keegan, chairman and chief executive, said Goodyear made progress during the fourth quarter on its plan to achieve $1.8 billion to $2 billion in cost savings by the end of 2009. He said more than $1 billion in savings have been achieved since 2006.

“We are well positioned to deal with an economic slowdown and are prepared to take contingency actions as necessary if economic conditions worsen,” Keegan said in a conference call with analysts.

Goodyear’s results were down from its third quarter, when it earned $668 million, or $2.75 per share, largely due to its sale of nearly all of its engineered products business for $1.48 billion to EPD Inc., part of Washington-based private equity firm The Carlyle Group.

The company manufactures tires and chemicals. It operates in 26 countries with about 70,000 employees.