CHICAGO - Goodyear Tire & Rubber Co. reported its largest quarterly loss in more than 10 years on Thursday as the struggling tiremaker took a previously announced charge to write down the value of tax credits.
The Akron, Ohio-based company reported a net loss for the 2002 fourth quarter of $1.1 billion, or $6.30 a fully diluted share, compared with a year-ago net loss of $174.0 million, or $1.07 a share.
Before one-time items, the loss would have narrowed to about $35 million, or 20 cents a share, from $47.1 million, or 29 cents a share, last year.
Analysts' estimates for Goodyear's results before items ranged from a profit of 3 cents a share to a loss of 10 cents a share, according to Thomson First Call. The average First Call estimate was a loss of 4 cents.
Sales rose 1.7 percent to $3.53 billion from $3.47 billion.
The company cited improvement at its international tire business and engineered products, but said business conditions and results in its North American tire unit remain weak.
The North American tire unit, Goodyear's largest division, had an operating loss of $33.6 million for the quarter, compared to a year-earlier loss of $44.5 million.
"All four of our international tire businesses achieved a higher profit margin compared to a year ago, with margins more than doubling in three of those businesses," said Robert Keegan, Goodyear's president and CEO, in a release.
The company, as expected, took a non-cash charge of $1.1 billion, or $6.17 a share, for its tax credits. Such credits can only be used to offset taxes on profits and because Goodyear has lost money for the past two years, it assumes the credits are worth nothing.
If the company starts making money again, it can reverse the charge.
During the fourth quarter, Goodyear also had a gain of $11.1 million, or 6 cents a share, from asset sales and a gain of $1.4 million, or 1 cents a share, from previous restructuring efforts.
The announcement comes two days after Goodyear completed a new financing agreements of $3.3 billion, up from $2.94 billion.
It was the latest step Goodyear has taken several steps to strengthen its balance sheet amid slow North American tire demand and higher raw material prices.
The company recently put its profitable chemicals unit on the block, stopped paying a dividend for the first time since the Great Depression of the 1930s, and halted its contributions to employees' 401(K) retirement accounts. It also has tried to improve its relationships with dealers.