Goodyear Reports Fourth Quarter, Full Year Results for 2010

AKRON, Ohio, Feb. 10, 2011 /PRNewswire-FirstCall/ -- The Goodyear Tire & Rubber Company (NYSE: GT) today reported fourth quarter and full-year 2010 results with quarterly segment operating income of $224 million driving full-year segment operating income of more than $900 million.

"I'm very pleased with Goodyear's performance in the fourth quarter and the full year of 2010. Our operating results reflect significant recovery, with improvement across all of our businesses versus last year despite escalating raw material costs," said Richard J. Kramer, chairman and chief executive officer.  

"The percentage of new products in our overall lineup is the highest ever and is driving record revenue per tire increases and continued success in targeted markets," he added.

"Our selective approach to the business continues to present strong profit growth opportunities.  Goodyear's leading brands and technology offer customers in targeted segments with an outstanding value proposition," Kramer said.

"We also remain firmly committed to improving our competitiveness and, as a result, have announced plans to close our Union City, Tenn. plant."

Goodyear's fourth quarter 2010 sales were $5.1 billion, up 14 percent from the 2009 quarter.  Tire unit volumes totaled 45 million, up 4 percent from 2009.

Fourth quarter sales reflect the $130 million impact of the increase in volume.  Sales benefited from record price/mix improvements, which drove revenue per tire, excluding the impact of foreign currency translation, up 12 percent over the 2009 quarter.  Sales were also impacted positively by a $159 million increase in sales in other tire-related businesses, primarily third-party chemical sales in North America.  Unfavorable foreign currency translation reduced sales by $111 million.  

The company had segment operating income of $224 million in the fourth quarter of 2010, down $25 million from the year-ago quarter.  Segment operating income reflected improved price/mix of $315 million and the benefits of higher volume, offset by $430 million in higher raw material costs ($397 million net of raw material cost reduction actions).  Unfavorable foreign currency translation reduced segment operating income by $17 million.  Actions to reduce costs provided a $119 million benefit.

The 2010 fourth quarter included total charges of $213 million (87 cents per share) due to rationalizations, asset write-offs and accelerated depreciation, $20 million (8 cents per share) related to the elimination of the subsidized essential goods exchange rate in Venezuela, and a charge of $18 million (7 cents per share) related to a claim regarding the use of value-added tax credits in prior periods; and gains of $31 million (13 cents per share) on asset sales, primarily in Asia, and $22 million (9 cents per share) related to net tax benefits primarily due to tax law changes in the U.S. and other countries.  All amounts are after taxes and minority interest.

Goodyear's fourth quarter 2010 net loss was $177 million (73 cents per share), compared with net income of $107 million (44 cents per share) in the 2009 quarter.  All per share amounts are diluted.

See the table at the end of this release for a list of significant items impacting the 2010 and 2009 quarters.

Full-Year Results

Goodyear's annual sales for 2010 were $18.8 billion, up 16 percent from $16.3 billion in the 2009 period.  Sales reflect the $1 billion impact of an 8 percent improvement in tire unit volume as well as a $582 million increase in sales in other tire-related businesses, primarily third-party chemical sales by North American Tire.  Sales also reflect price/mix improvements and unfavorable currency translation.  Revenue per tire, excluding the impact of foreign currency translation, increased 6 percent over 2009.