Goodyear Earnings Fall 47 Percent
AKRON, Ohio (AP) _ Goodyear Tire & Rubber Co. reported a 47 percent decline in third-quarter profits Thursday, saying earnings were hurt by the company’s inability to keep up with growing demand for tires in North America.
The world’s largest tire manufacturer earned $97.2 million, or 61 cents a share, down from $185 million, or $1.17 per share, in the same period last year.
Still, Goodyear’s earnings exceeded the 49 cents expected by analysts surveyed by First Call/Thomson Financial.
Revenue rose to $3.29 billion from $3.19 billion a year earlier, with sales at its tire unit increasing 8.1 percent.
Goodyear said earnings fell because the company was unable to meet higher-than-expected demand in North America. According to the Rubber Manufacturers Association, demand for tires rose 4 percent from last year, with demand for performance tires up 9 percent and demand for light truck radials up 8 percent.
To keep up, Goodyear has decided to continue operations at its Gadsden, Ala., plant, a factory that had been scheduled for closure by the end of the year.
Goodyear cited further problems with integrating the Dunlop tire business into existing operations. The company took over Dunlop’s North American and European production from Sumitomo Rubber Industries Ltd. last month.
The company also said it would streamline its brands into specific consumer price brackets _ Goodyear targeting the premium market, Dunlop occupying the mid-range and Kelly-Springfield shooting for economy shoppers.
Tire lines that don’t fit into that structure will be eliminated, the company said.
Goodyear stock fell 50 cents to $44.31 1/4 a share on the New York Stock Exchange Thursday.
For the first nine months of 1999, Goodyear earned $188 million, or $1.18 per share, down from 1998 profits of $560 million, or $3.53 per share. Revenue fell to $9.32 billion from $9.42 billion.