AKRON (Oct. 2, 2001) — Goodyear has reduced its quarterly stock dividend to 12 cents per share in a move the company said is intended to “increase its financial flexibility.”
Recently, the company has paid stockholders a quarterly dividend of 30 cents per share. However, over the years the Akron-based tire maker has been known to modify its dividend in response to changing financial and economic circumstances.
Days earlier, in a separate announcement, Goodyear said it was shaving its third-quarter earnings forecast to 5 cents per diluted share based on what it described as weak markets that were further disrupted by the Sept. 11 terrorist attacks on the U.S. The company earned 11 cents per share in the third quarter of 2000.
Chairman and CEO Sam G. Gibara, in this latest announcement Oct. 2, pointed out that the 12-cent dividend still exceeds that paid by Goodyear's tire-making peers as well as the current dividend yields of the Standard & Poors 500 and Dow Jones Industrials indices.
Mr. Gibara said the board´s decision to reduce the dividend was made in response to current economic and business conditions— especially for companies impacted by what he termed “rapidly deteriorating business conditions.”
He said Goodyear will continue efforts to reduce costs, drive down working capital requirements, align tire inventories with weakening market demand, limit capital expenditures and sell off non-core assets.
"While we work to maintain a strong balance sheet," he said, “our businesses remain focused on the consumer and product excellence. Despite the difficult times, we continue to seek opportunities to increase our volumes and profitably capture market share.”