Goodyear income drops
Posted: Tuesday, October 30, 2012 12:02 am
By: By TOM KRISHER AP Business Writer
By TOM KRISHER
AP Business Writer
DETROIT (AP) — Shares of Goodyear Tire & Rubber Co. fell more than 10 percent on Friday as the company’s third-quarter net income and revenue dropped on lower tire sales in Europe.
The Akron, Ohio, company’s results fell short of Wall Street’s expectations as problems in Europe offset cost cuts and profits in North America. Its executives said additional cuts are coming because of economic uncertainty.
Goodyear’s numbers highlight a problem that is plaguing many global companies in auto-related businesses. Profits in North America are being offset by falling earnings in Europe as the region’s economy continues to unravel on concerns about government debt. The same problem almost certainly will surface when General Motors Co. and Ford Motor Co. report earnings next week.
Goodyear reported net income of $110 million, or 41 cents per share, for the three months ended Sept. 30. That’s down from $161 million, or 60 cents per share, a year earlier. Excluding one-time items such as restructuring costs and asset write-offs, the company made 53 cents per share. Analysts polled by FactSet expected 59 cents per share.
Revenue fell 13 percent to $5.26 billion as the slowing European economy cut tire sales. Analysts expected $5.87 billion.
The company’s stock plummeted $1.28, or 10.4 percent, to close at $11.02 Friday.
They are 19 percent above their 52-week low of $9.24 set in early June. They traded as high as $15.80 in January.
Chairman and CEO Richard J. Kramer said Goodyear still expects $1.6 billion in segment operating income and positive cash flow in 2013.