Goodyear delay spurs minor backlash
Reaction to another delay in reporting its first-quarter financial results was swift by not all bad for the Goodyear Tire & Rubber Co.
On the New York Stock Exchange, Goodyear's stock price dropped 2.6% -- 24 cents a share -- to $8.98 a share by the end of June 16 trading. That compares to a 52-week high and low of $11.97 and $4.49, respectively.
Analyst Saul Ludwig, a managing director with the KeyBanc Capital Markets division of McDonald Investments Inc., says he was surprised by the delay, but believes Goodyear is just being more cautious than usual given its recent accounting problems.
Other analysts, as quoted in the Wall Street Journal and Akron Beacon Journal, criticized the company, but fell short of categorizing the delay as anything but a minor embarrassment.
Keith Price, Goodyear's director of corporate communications programs, says the company will file its first-quarter results well before the June 30 deadline as required by its credit facilities.
Goodyear did, however, preview some of the results.
The company suffered a net loss between $75 million and $85 million on record sales of close to $4.3 billion. That compares to a net loss of $196.5 million on sales of $3.5 billion for the first quarter of 2003.
The $4.3 billion in sales was the highest total for any quarter in Goodyear history.
Also, six of the company's seven business units -- including North America -- significantly improved their operating results.
Goodyear says first-quarter 2004 results will include rationalization charges of close to $20 million and income tax of approximately $55 million.
Goodyear has been late with its last three quarterly earnings statements. On October 23, 2003, the company announced it would have to restate its financial results for the years 1998-2002 and for the first and second quarters of 2003 "to record adjustments primarily resulting from the implementation of an enterprise resource planning accounting system (ERP) in 1999 and errors in inter-company billing systems."
Goodyear posted its fourth-quarter results, full-year results and all its restatements on May 19.