Goodyear posts $63.2 million loss in 2002 first quarter

AKRON (April 24)—Goodyear posted a net loss of $63.2 million in the first quarter of 2002, citing on-going weakness in retail tire demand in North America and other key markets. The Akron tire maker reported a net loss of $46.7 million in the same period in 2001. Net sales slipped 3 percent to $3.31 billion during the quarter ended March 31, despite a less-than 1-percent increase in tire unit volume to 53 million units. Goodyear said the quarter's results include a pretax charge of $10 million that is related primarily to the return of inventory following the April 6 closure of the Penske Automotive Centers in the U.S. In addition, the quarter also was affected by about $95 million in costs resulting from significant production cutbacks in the fourth quarter of 2001 because of inventory reduction programs and lower demand. Foreign currency exchange issues also impacted earnings negatively by $13 million, primarily due to currency devaluation in Argentina, the tire maker said. In North America, Goodyear reported an operating loss of $51.3 million resulting primarily from higher costs due to production cutbacks in last year's fourth quarter, the charge related to the Penske closure and a shift in channel and product mix. Sales grew 1.7 percent in the region to $1.65 billion, despite a 2.5-percent drop in replacement tire volume.