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DATE News (chronologically)
02/11/11
automotive
Antiquated Goodyear continues to bleed red ink
Goodyear’s sales grew 14 percent for the fourth quarter of 2010 and 16 percent for the full year compared with the same periods in 2009 as segment operating earnings improved substantially for the year. Despite the improved sales, however, the Akron-based tire maker continued to lose money: $177 million for the quarter, compared with net income of $107 million for the fourth quarter of 2009, and a $216 million net loss for the year, compared with a net loss of $375 million for the full year of 2009.

“Higher raw materials costs are our most significant challenge,” said Goodyear Chairman Richard J. Kramer during a Feb. 10 conference call to discuss the company’s results. The price of natural rubber alone, Mr. Kramer said, has risen 40 percent since October 2010 to $2.50 per pound.

Foreign currency translations also have hurt profits, including devaluation in Venezuela and a weaker euro, said Mr. Kramer and Darren R. Wells, Goodyear executive vice president and CFO.

Fourth-quarter 2010 sales totaled $5.1 billion, with tire unit volumes up 4 percent to 45 million, Goodyear said. Sales in the fourth quarter benefited from an improved price/mix, which drove revenue per tire up 12 percent minus the impact of foreign currency translation, the company said.

Other tire-related businesses, such as third-party North American chemical sales, saw a sales increase of $159 million, although unfavorable foreign currency translation reduced sales by $111 million, Goodyear said.

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