AKRON (May 19, 2004) — Goodyear lost $802.1 million last year though the Akron-based tire maker's net sales for 2003 were a record $15.1 billion, up 9.1 percent from 2002.
The company reported the delayed full year and quarterly results plus another $164.8 million in restatement adjustments to past results, for a total reduction in net income over past years of $280.8 million.
The loss compares to 2002's net loss of $1.2 billion, though much of that was the result of a charge. Goodyear estimated that raw material cost increases negatively impacted 2003's loss by $335 million, while currency translation had a favorable impact of about $51 million.
For the fourth quarter, Goodyear reported a net loss of $434.4 million compared with a net loss of $1.2 billion in the same period last year. Sales in the quarter were up 11.6 percent to $3.91 billion from $3.51 billion the previous year.
Tire unit volume was 52.8 million units in 2003's fourth quarter and 213.5 million units for the year. Both are slightly down around 1 percent.
In North American Tire (NAT), unit volume fell 1.1 percent in the fourth quarter and 2.5 percent for the year, Goodyear said. Shipments to original equipment customers increased less than 1 percent for the quarter and decreased 4.5 percent for the year. Replacement volume fell 1.7 percent for the quarter and 1.5 percent for the year.
Sales in the ailing unit increased 3.4 percent to $1.67 billion in 2003's fourth quarter and 0.6 percent for the year. NAT reported a segment operating loss of $15.6 million for the quarter and $128.7 million for the year. Goodyear said cost saving initiatives favorably impacted the results in both periods, but they were not enough to offset raw materials prices and health care costs.
First quarter 2004 results will delayed until mid-June because of the delays in filing the 2003 reports. But Goodyear said it expects stronger performance than the year-ago period because of price and mix improvements plus cost reductions. First quarter operating results are expected to increase more than 25 percent across all of Goodyear's businesses except Asia.
“There is much work to be done, but we are attacking our goals very aggressively,” said Robert Keegan, CEO and chairman. “We entered 2004 with a great deal of momentum and with high expectations. We are pleased with the results we are seeing for the first quarter of 2004, which will demonstrate that we are gaining traction in our turnaround initiatives.”
Raw material costs are still expected to increase 5 percent in the first quarter.
Goodyear also announced its financial restatements. The $164.8 million restatement is in addition to the $84.7 million from 2003's third quarter and $31.3 million from 2003's second quarter for a total of $280.8 million.
The tire maker also said its European lenders have extended its deadline until June 4 to file audited 2003 financial statements for Goodyear Dunlop Tires Europe BV.