Goodyear fell 0.4% after the company announced that operating income in 2013 will be lower than previously predicted.
The largest US tiremaker dropped 0.4% to $13.86 at the close in New York, after falling 5.8%, after the company announced that 2013 will bring a lower operating profit as it tries to fix its operations in Europe. Goodyear announced it plans to gain $1.4 billion to $1.5 billion in operating income in 2013, a drop from the previous forecast of $1.6 billion, due to the sluggish demand in Europe, which reached the lowest level in the past 19 years.
Goodyear reported fourth-quarter sales down 11% to $5.05 billion, compared with the analysts’ estimates of $5.34 billion. Tire sales in North America dropped 10% to $2.31 billion and in Europe, Middles East and Africa region sales fell 16% to $1.6 billion. Recently the tiremaker announced it will close a farm-tire facility in France, reducing its workforce in the country by 39%, due to low demand and labor disputes.
Exiting the farm-tire business in France will raise operating profit in this market by $75 million, according to Goodyear. Besides the costs of the French factory closing and other one-time gains and costs, the profit reached 39 cents a share, compared with the analysts estimates of 20 cents.