AKRON—Goodyear's earnings and worldwide tire unit sales increased in the fourth quarter, compared with the 1995 period. But one-time charges totaling $572.2 million cut into the firm's net income for the year, the company said Feb. 5. Fourth-quarter income, before one-time charges, rose 12 percent to $164 million from $146.4 million in the 1995 period. But after calculating in the effect of one-time charges, Goodyear reported a net loss of $408.2 million.
Fourth-quarter sales rose slightly over the 1995 period to $3.27 billion, while worldwide tire unit sales, in particular, increased 7.2 percent for the quarter, Goodyear said.
The one-time charges mainly involved a write-down of its historically troubled All American Pipeline, a crude oil line from California to Texas. The charges also comprised costs associated with the rationalization of its operations, including the closing of a tire plant in Greece and the discontinuance of PVC production in Niagara Falls, N.Y.
For the year, earnings before one-time charges were up 10.4 percent to $674.7 million from $611 million, while net income was $101.7 million. Annual sales fell marginally—about 0.5 percent—to $13.11 billion, compared with 1995.
Revenues were negatively impacted by competitive pricing pressures around the world and an unfavorable translation of international currencies due to the stronger U.S. dollar, Goodyear said.
Meanwhile, Goodyear's board of directors also approved a three-year $600 million stock buy-back program that will ``give Goodyear better flexibility in funding its acquisition program and to optimize shareholder value.''
Chairman and CEO Samir Gibara said the company's strong cash flow position—up nearly 40 percent to $900 million over the previous year—prompted the buy-back decision.
In 1996, Goodyear completed four acquisitions totalling more than $330 million, a feat ``unprecedented in the company's history,'' Mr. Gibara said.
``We have made substantial progress toward the company's strategic goals, and our newly restored financial strength is providing us with the flexibility needed to aggressively position Goodyear for the future,'' he said.