Despite a 10.7-percent increase in sales, Goodyear posted net losses of $105.9 million for the third quarter and $332.4 million so far this year.
The Akron-based tire maker also reported that its completed financial restatement reduced net income from 1998 through the first half of 2003 by $84.7 million. The restatement caused an increase of $10.4 million so far this year, a decrease of $16.9 million in 2002, a decrease of
$26.2 million in 2001 and an increase of $900,000 in 2000. The impact on amounts related to years prior to 2000 was recorded as a $52.9 million reduction in shareholder's equity at Jan. 1, 2000, the company said.
In the third quarter, Goodyear's loss compares to net income of $32.7 million for the same period last year. Sales for the current period were $3.9 billion, up from $3.5 billion last year. Tire unit volume rose to 55.3 million units from 54.4 million units in 2002. Goodyear said the effect of currency improved sales by about $177 million, and higher selling prices and improved product mix also had a positive impact.
In its struggling North American Tire unit, Goodyear reported third quarter sales of $1.79 billion, up from $1.74 billion last year. The segment reported an operating loss of $31.8 million vs. net income of $8.9 million in 2002. For the first nine months, the segment reported sales of $5.08 billion, down slightly from $5.09 last year. Also for the nine months NAT reported a net operating loss of $100 million, compared to a loss of $2.2 million last year.
The segment's tire unit volume increased 0.4 percent for the quarter but fell 3 percent for the first nine months. Compared with 2002, NAT's replacement volume increased 4.1 percent for the quarter and fell 1.5 percent for the year-to-date. Shipments to original equipment customers fell 7.9 percent in the quarter and 5.9 percent for the nine months.
``Despite disappointing segment operating income, we continue to see positive trends in parts of our North American Tire business, where Goodyear and Dunlop brand gained share in the important consumer replacement market,'' said Bob Keegan, chairman and CEO. ``North American Tire achieved its highest quarterly sales in two years, which indicates strong demand for our products among our dealer partners and consumers.''
Overall, the company for the first nine months of the year posted a net loss of $332.4 million, down from a net income of $6.6 million in 2002. Various charges from staff reductions, manufacturing consolidations, significantly higher raw materials costs and other factors contributed to the decline.
In its 10-Q, Goodyear said it expects charges in the fourth quarter this year of about $155 million and an accelerated depreciation charge of about $100 million relating to the planned closure of its Huntsville, Ala., plant by Dec. 5. In addition to the loss there of 1,100 hourly and salaried workers, Goodyear said it also plans to lay off about 1,200 workers through manufacturing, administrative and retail consolidations in North America, Europe and Latin America.