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Goodyear reports net loss of $77 million in 2008

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Goodyear Tire & Rubber Co. reported a net loss of $77 million in 2008 compared to 2007 net income of $602 million.

The 2007 results included an after-tax gain of $508 million on the sale of the company's former Engineered Products business.

Goodyear's sales for 2008 were $19.5 billion, less than 1% lower than 2007's record $19.6 billion.

The 2008 sales reflect the $1.3 billion negative impact resulting from an 8.5% reduction in tire volume. Also, impacting the change in sales was the 2007 divestiture of the company's T&WA tire mounting business, which contributed sales of $639 million in 2007. Favorable foreign currency translation positively impacted sales by $383 million.

Sales benefited from pricing and mix improvements, which drove revenue per tire, excluding the impact of foreign currency translation, up 8% compared to 2007.

Asia Pacific Tire, Latin American Tire and Europe, Middle East and Africa Tire each achieved record full-year sales.

Segment operating income was $804 million, down from $1.2 billion in 2007. This reflects the lower unit sales, which resulted in a negative volume impact of $249 million and higher conversion costs of $487 million, primarily driven by under-absorbed fixed costs of $373 million.

Improvements in pricing and product mix of approximately $942 million more than offset higher raw material costs, which increased 13%, or approximately $712 million, compared to 2007.

Asia Pacific Tire and Latin American Tire achieved record full-year segment operating income.

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