Goodyear Shares Fall Hard on Financial News - Tire Review Magazine

Goodyear Shares Fall Hard on Financial News

(Akron/Tire Review) Investors reacted negatively to Goodyear Tire & Rubber Co.’s pre-2005 financial report, pushing the tiremaker’s shares down some 17% on Jan. 31.

Goodyear shares dropped $3.12, closing at $15.64, which was its single largest one-day decline since February 2003.

The decline came just two days before Goodyear kicks off its annual dealer meeting, which will be held in Nashville beginning tomorrow. It is expected that Goodyear will unveil a new high performance tire line during the meeting.

On Monday, Goodyear said that its expected fourth quarter operating profit to be about $238 million, less than the financial community expected, while raw material costs increased more than the tiremaker expected. Further, Goodyear said its preliminary profit figures did not include impact from Hurricanes Katrina and Rita.

Goodyear plans to issue its 2005 financial results on Feb. 16.

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The Goodyear Tire & Rubber Company announced cost savings actions in response to a challenging industry environment and cost pressure driven by inflation. Planned rationalization and workforce reorganization would result in an approximately 5% reduction in salaried staff globally or about 500 positions, the company said.

“Our fourth quarter results fell short of our expectations given a significantly weaker industry backdrop, particularly in Europe,” said Richard J. Kramer, chairman, chief executive officer and president. “While our businesses have performed at a high level through the volatility of the past several years, the uncertain near-term macroeconomic outlook and continuing impacts of inflation make these difficult actions necessary to position our business for future success.”

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