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Even With $1.4B Sales Drop, Goodyear Boosts Net Income for 2014

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Goodyear-logo-RSDollar sales were down a rousing $1.4 billion, but Goodyear Tire & Rubber Co. still delivered improved operating and net income for 2014, according to its fourth quarter and full-year financial results released this morning.

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Globally, Goodyear posted sales of $18.1 billion, down considerably from $19.5 billion in sales for 2013. Tire unit volumes totaled 162 million, down marginally from 2013’s 162.3 million tires. On the replacement side, shipments were up 1%, while OE suffered a 3% downturn.

Operating income for 2014 was $1.7 billion, up 8% from 2013, driven primarily by lower raw material costs. Net income was $2.4 billion, significantly up from 2013’s $600 million net gain. Adjusted net income was $790 million for 2014, up year-over-year from $725 million.

Goodyear’s North American Tire unit saw unit sales fall from 61.7 million in 2013 to 61.1 million for 2014. Historically, Goodyear North American Tire unit sales have seen a fall off in six of the last seven years – 10 million total units since 2008; unit sales were 62.6 million in 2012, 66 million in 2011, 66.7 million in 2010, 62.7 million in 2009 and 71.1 million in 2008.

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Dollar sales for North American Tire were $8.09 billion for fiscal 2014, down from FY2013’s $8.68 billion, but operating income rose from $691 million for 2013 to $803 million last year.

“While industry conditions led to mixed results globally, we achieved record fourth quarter segment operating income in North America as well as in Asia Pacific. Our continued performance validates the successful execution of our strategy,” said chairman and CEO Rich Kramer.

“The release of our $2.2 billion U.S. tax valuation allowance after 12 years is a major milestone for Goodyear. It marks the completion of the successful turnaround of our North America business.”

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The company said the tax valuation allowance is “a one-time, non-cash benefit to earnings in 2014. While the company will record charges for income taxes in future periods, it does not expect to pay cash taxes in the U.S. for approximately five years.”

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