February 13, 2014
Not good, great: Goodyear makes $600 million
Goodyear Tire & Rubber Co. posted net income of $228 million on net sales of $4.8 billion for the fourth quarter ended Dec. 31, 2013. That compares to zero income on sales of more than $5 billion for the same period last year.
The company's income-to-sales ratio was 4.7%.
Segment operating income for the quarter was up 54%, from $272 million to $419 million.
For its fiscal 2013, Goodyear recorded net income of $600 million on net sales of $19.5 billion. That compares to income of $183 million on sales of nearly $21 billion for its fiscal 2012.
Segment operating income for the year was up 26.6%, from more than $1.2 billion to nearly $1.6 billion.
"Our outstanding fourth quarter and full-year earnings confirm that our strategy is working and demonstrate Goodyear's ability to deliver sustainable earnings growth and strong free cash flow," says Richard Kramer, chairman and CEO. "Our North America business achieved record earnings in all four quarters of 2013."
(For more on the results of Goodyear's North American business unit, click on "Goodyear's operating income: It's all good.")
Goodyear has taken steps to fully fund its hourly United States pension plans with $1.15 billion of available cash balances and has begun the process to freeze and de-risk the plans.
"Our 2013 performance has given us the confidence to fully fund our hourly U.S. pension plans," says Kramer. "This is a major milestone in our history and will provide greater transparency to our underlying tire business while improving earnings and cash flow.
"Moving past these legacy obligations is a new beginning for our company."
Goodyear's fourth-quarter 2013 sales were down 5% from the year ago quarter. They reflect $64 million in higher tire unit volumes, but:
* $178 million in lower sales in other tire related businesses, most notably third party chemical sales in North America;
* $36 million in lower price/mix, principally due to lower raw material costs; and
* $102 million in unfavorable foreign currency translation.
"As industry volumes recover, we continue to see mixed growth rates globally, but there is strong growth in the high-value-added segments we are targeting," says Kramer. "We remain disciplined in our approach, seeking growth where our brands and value proposition enhance our profitability."