Goodyear Q4 Profit Rises - Update

(RTTNews) - Goodyear Tire & Rubber Co. (GT) Thursday reported a rise in profit for the fourth quarter, despite a drop in revenues, driven by the tire maker's strong earnings at its North America business, while last year's results were impacted by one-time charges.

Earnings for the quarter came in ahead of Wall Street estimates, while revenues fell short of expectations. Shares of Goodyear are currently trading up seven percent.

Commenting on the results, Chief Executive Richard Kramer said, "Our outstanding fourth quarter and full-year earnings confirm that our strategy is working and demonstrate Goodyear's ability to deliver sustainable earnings growth and strong free cash flow. Our North America business achieved record earnings in all four quarters of 2013."

Akron, Ohio-based Goodyear's profit for the fourth quarter was $228 million or $0.84 per share, compared to a breakeven reported in the prior-year quarter.

For the recent fourth quarter, Goodyear recorded asset write-offs and accelerated depreciation of $0.06 per share, tax benefits of $0.15 per share and gains from asset sale of $0.01 per share.

Last year, the company recorded asset write-off of $0.34 per share, discreet tax charge of $0.04 per share, loss related to strike in South Africa of $0.02 per share among other items.

On average, 10 analysts expected earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude one-time items.

Goodyear's fourth-quarter revenues dropped 5 percent to $4.79 billion from $5.05 billion a year ago. Six analysts polled by Thomson Reuters had a consensus revenue estimate of $4.95 billion for the quarter.

The revenue drop reflects lower third party chemical sales and unfavorable foreign currency translation. Tire unit volumes totaled 40.7 million, up 2 percent a year ago.

North America's fourth quarter sales decreased 8 percent to $2.1 billion, however, the unit's operating profit surged 72 percent driven by favorable price/mix of raw materials, lower conversion costs and increased tire volume. Tire units sold in the North America improved to 16.3 million units from 15.8 million units a year ago.

Moving ahead, the company continues to see a 2 percent to 3 percent increase in unit volumes for 2014.

GT is currently trading at $26.17, up $2.00 or 8.27%, on the Nasdaq.