Goodyear Tire and Rubber
on Monday said that raw material costs would weigh on the fourth quarter.
The tire company forecast sales of $4.9 billion for the current, or fourth, quarter, a bit lower than the $5.09 billion analysts polled by
For 2005, Goodyear sees sales of nearly $20 billion, topping the Street consensus of $19.88 billion.
The announcement sent shares of Goodyear down $1.76, or 9.4%, in recent after-hours trading, to $17.
Segment operating income at the Akron, Ohio, tire company for 2005 is expected to be up 20% to 25% from the previous year, the company said in a statement.
Excluding the effects of hurricanes in the U.S. Gulf Coast region, the company expected fourth-quarter operating income to be roughly $238 million, in line with the same period a year ago.
According to the company, a 13% increase in raw material costs was greater than it had anticipated. "We are working worldwide to reduce our costs and working capital needs, as well as to further improve our product and brand mix," said CEO Robert Keegan.
"Nevertheless, the escalating cost of raw materials and currency fluctuations continue to challenge our businesses," he said.
The company called its previous quarter the strongest in seven years and said late in October that it expected moderate gains in the fourth quarter.
Shares closed the regular session down 11 cents to $18.76.
Goodyear is set to report fourth-quarter earnings on Feb. 16.