AKRON, Ohio — The Goodyear Tire and Rubber Company today reported record sales for the fourth quarter and the full year of 2006, topping the $20 billion mark for the first time in company history.
Goodyear’s fourth quarter 2006 sales were nearly $5 billion, a 2% increase compared with the 2005 quarter excluding the impact of businesses divested in 2005.
Strong sales came despite an 8% decline in tire volume, principally due to a 12-week strike in North America by the United Steelworkers and the company’s action to exit certain segments of the private label tire business. According to company officials however, sales benefited from improved pricing and product mix in the company’s international tire businesses, all of which achieved sales records.
“We made outstanding progress in several key focus areas in 2006, in spite of the challenges from the strike, high raw material costs and difficult market dynamics, said Robert J. Keegan, chairman and CEO. This allowed us to continue to grow our top line and deliver record results in several of our businesses while creating strong business platforms to carry Goodyear’s profitable growth into the future.”
For the 2006 fourth quarter, Goodyear reported a net loss of $358 million, which includes an estimated strike impact of $367 million; $184 million in after-tax charges for rationalization, including accelerated depreciation and asset write-offs principally related to plant closures; and a one-time gain of $153 million related to the favorable resolution of a tax contingency.
“Looking beyond the impact of the strike and our restructuring actions one can see the true performance of our business and the significant strength in the underlying results,” added Keegan. “A series of courageous decisions and successful execution against our plans in 2006 position our company well for earnings growth now, and for cash flow acceleration in 2008 and beyond.”
Improvements in pricing and product mix of approximately $210 million, driven by the company’s strategy to focus on innovative branded products supported by strong marketing efforts, substantially offset raw material cost increases of an estimated $220 million compared to the prior-year quarter. Revenue per tire increased 5% compared to the fourth quarter of 2005.
The European Union; Eastern Europe, Middle East and Africa; and Asia Pacific tire businesses each achieved fourth quarter segment operating income records.
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