Goodyear Tire & Rubber Co posted a quarterly profit on Thursday that exceeded Wall Street forecasts, supported by better-than-expected results at its key North American unit and shares rose 2.5 percent. Goodyear, the largest US tire maker, posted a much lower loss in its North American Tire unit than it had warned of in October supported by stronger-than-expected tire sales volume and price increases.
The company said global tire demand was expected to rise overall in 2010, but the recovery would vary "considerably" by region and product. It expects high raw materials costs and weak demand for commercial truck tires to persist in 2010. Goodyear expects to cut costs by $1 billion over the next three years after meeting its four-year cost-cutting goals. Goodyear cut 5,700 jobs globally in 2009, exceeding its target of 5,000 job cuts.
The company reported net income of $107 million, or 44 cents per share, in the quarter, compared with a net loss of $330 million, or a $1.37 loss per share, a year earlier. Revenue rose 7.3 percent to $4.4 billion. Goodyear earned 14 cents a share excluding one-time items. Analysts on average expected it to report a 9-cent-per-share loss on that basis, according to Thomson Reuters I/B/E/S.
Goodyear reported a $27 million operating loss in the North American Tire unit as revenue fell 3 percent and raw materials costs were lower than expected. The tire maker forecast in October that the unit would have a fourth-quarter operating loss, with earnings down $75 million to $125 million from the scant $2 million profit it had made during the third quarter. Revenue and profits rose in Goodyear's Europe, Latin America and Asia business regions. Goodyear shares were up 2.5 percent, or 35 cents, at $14.25 in Thursday's premarket trading.
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