Goodyear posts adjusted income of $725 million
Goodyear Tire & Rubber Co. posted net income of $2.1 billion on net sales of more than $4.3 billion for the fourth quarter ended Dec. 31, 2014. Income includes a one-time, non-cash tax valuation allowance of more than $2.2 billion.
Excluding the tax valuation allowance and including other one-time items, Goodyear's adjusted net income for the quarter was $166 million. In fiscal 2013, Goodyear posted net income of $228 million on sales of nearly $5 billion.
The company reported segment operating income of $359 million in the fourth quarter of 2014, compared to $419 million in 4Q 2013. The 14.3% decline was driven by reduced price/mix and lower volume, which more than offset the benefits of lower raw material costs and other cost savings actions, according to Goodyear.
For the full year, Goodyear recorded net income of $2.4 billion on net sales of $18.1 billion. Again, when taking one-time charges into account, the company's adjusted net income for the year was $725 million. In fiscal 2013, net income was $600 million on net sales of $19.5 billion.
The company also recorded full-year segment operating income of $1.7 billion, a Goodyear record.
"We delivered record full-year segment operating income, successfully navigating a challenging global economic environment," says Richard Kramer, chairman, CEO and president.
"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.
"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."
In the North America Business Unit (which covers sales in the U.S. and Canada), Goodyear recorded $2.1 billion in sales in 4Q, a 1% decrease compared to 4Q 2013. The company says the decrease reflects a 1% decrease in tire unit volume (replacement tire shipments were down 1%; original equipment volume was flat) and unfavorable foreign currency translation, partially offset by improved price/mix. Full-year sales totaled close to $8.1 billion, a decrease of 6.9%.
Segment operating income reached record highs in the fourth quarter (up 15%) and full year (up 16.6%).
North America, fiscal 2014 results (with 2013 totals in parentheses)
Tire units: 61.1 million (61.7 million).
Sales: $8.1 billion ($8.7 billion).
Segment operating income: $803 million ($691 million)
"Led by our momentum in North America, we are on target to achieve 2015 segment operating income growth of 10% to 15% above our record setting $1.7 billion in 2014, despite severe headwinds from the increasing strength of the U.S. dollar," says Kramer.