Goodyear Tire & Rubber Co. (GT:US) fell less than a percent after the largest U.S. tiremaker said operating income this year would be lower than it originally forecast as it tries to repair its European operations.
Goodyear slipped (GT:US) 0.4 percent to $13.86 at the close in New York after plunging as much as 5.8 percent. The shares (GT:US) have risen 0.4 percent this year. Goodyear slid 2.5 percent in 2012, compared with a 13 percent gain for the Standard & Poor’s 500 Index.
Goodyear said in a statement it will earn $1.4 billion to $1.5 billion in operating income this year, compared with an earlier forecast of $1.6 billion as demand for tires slowed with auto production in Europe, which is in its worst auto-sales slump in 19 years. Automakers including General Motors Co. (GM:US) and Ford Motor Co. (F:US) have announced plans to close European plants.
The company said fourth-quarter sales fell 11 percent to $5.05 billion. The average of four analysts’ estimates was $5.34 billion. Tires sold in Goodyear’s North America region fell 10 percent to $2.31 billion. In the Europe, Middle East and Africa unit, sales decreased 16 percent to $1.6 billion, Goodyear said. The two regions comprised almost 80 percent of Goodyear’s revenue (GT:US) in 2011.
Last month, Goodyear said it was closing its farm-tire plant in France, cutting 39 percent of its jobs in the country, amid labor disputes and lower demand. The closing and exiting of the farm-tire business in the region, will improve operating profit in the region by $75 million, Goodyear said in a U.S. regulatory filing Jan. 31.
Goodyear reported net income fell to $7 million, or break- even per share, compared with $18 million, or 7 cents, a year earlier, the Akron, Ohio-based company said in its statement. The per-share figure reflects dividends paid on preferred shares.
Excluding expenses to close the French factory and other one-time costs and gains, profit was 39 cents a share. The average estimate of eight analysts surveyed (GT:US) by Bloomberg was for a profit of 20 cents.
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