Raw-Material Costs Lead to Loss at Goodyear - TheStreet

Raw-Material Costs Lead to Loss at Goodyear

The company's sales rise 8% in the second quarter.
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Goodyear

(GT) - Get Report

said second-quarter sales rose, but the company posted a loss after factoring in charges and higher raw-material costs.

The company reported a loss of $73.6 million, or 42 cents a share, for the second quarter, compared with a profit of $28.9 million, or 18 cents a share, in the same period a year ago.

Sales rose 8% to $3.8 billion from $3.5 billion during the prior-year period. Tire volume slipped to 52.8 million units from 53.3 million last year.

The 2003 second quarter included a charge of 8 cents a share for staff reductions and manufacturing consolidations and a loss of 4 cents a share from asset sales. The tiremaker said the most important factor in the deterioration of its operating performance was an increase in raw-material costs of about $124 million.

Goodyear said the higher expenses were partly offset by cost-reduction actions, improved pricing and the positive effects of currency translation.

"We are disappointed in our financial results for the second quarter, but we are encouraged by the numerous positive trends in our company and we are optimistic about our turnaround," Goodyear said. "Our international tire businesses, as well as our engineered products and chemicals units, continue to perform well, and five of our businesses have recorded improved year-over-year segment operating income for five consecutive quarters."

Analysts polled by Thomson First Call expected a loss of 25 cents in the quarter.