AKRON (Feb. 23, 2005) — Goodyear expects all seven of its business units to report positive segment operating income for 2004's fourth quarter with overall quarterly income for the tire maker of about 55 to 65 cents per share plus sales of about $4.8 billion.
North American Tire (NAT)—Goodyear's largest business unit and the one that has struggled the most the past few years—is expected to report segment operating results about in line with the third quarter, when the unit posted segment operating income of $13.5 million. A fourth quarter profit would be the unit's third consecutive quarter in the black. But Goodyear did not say whether NAT would be profitable for the full year.
Among its other business units, Goodyear said segment operating income is expected to double in the European Union, rise about 50 percent in Latin America and increase about 15 percent in Chemical Products. The remaining businesses—Engineered Products, Asia and Eastern Europe, Middle East and Africa—will be about equal to fourth quarter 2003 levels.
“Our fourth quarter business unit results will reflect the ongoing progress of our turnaround efforts, including the benefits of new product introductions in all of our businesses,” said Robert Keegan, chairman and CEO. “We are building on the momentum of our first nine months of 2004 in which we achieved record sales and segment operating income that more than doubled compared to the previous year.”
Goodyear added that raw materials prices grew more than expected in the quarter, but they were offset by a variety of factors, including higher selling prices and acceptance of new products.
Also, Goodyear said it will refinance about $3.3 billion of its credit facilities, including a $1.3 billion asset-based credit facility and $650 million asset-based term loan both due March 31, 2006, and $650 million in credit facilities for the Dunlop Europe affiliate due April 30. Goodyear will replace those lines with $3.35 billion in five-year facilities due in 2010. The tire maker said the new facilities are expected to close in early April and carry lower interest rates than those they replace.