Tallahassee Journal

Goodyear earnings get big boost from $2.2B tax break

Goodyear earnings get big boost from $2.2B tax break

Goodyear Tire & Rubber said it had net income of $2.13 billion in the fourth quarter after a one-time $2.2 billion tax benefit, most of it booked in the fourth quarter, resulting in an enormous earnings jump from $235 million a year earlier. That worked out to $7.68 per share in the recent quarter, up from $0.84 a year earlier. But excluding the tax benefit, the Q4 net was $126 million.635597633056282912-AP-Earns-Goodyear

CEO Richard Kramer said, “The release of our $2.2 billion U.S. tax valuation allowance after 12 years is a major milestone for Goodyear. It marks the completion of the successful turnaround of our North America business.” The benefit carries forward. The company said the “release of the tax valuation allowance represents a one-time, non-cash benefit to earnings in 2014. While the company will record charges for income taxes in future periods, it does not expect to pay cash taxes in the U.S. for approximately five years.”

Earnings, adjusted for non-recurring gains, were $0.59 per share. The average forecast of analysts surveyed by Zacks Investment Research was $0.58 cents per share. Revenue fell 9.1% to $4.36 billion in the three months that ended Dec. 31, Analysts expected $4.39 billion, according to Zacks.

The company said sales were hurt by $256 million due to a stronger U.S. dollar and $181 million due to lower sales in Europe, the Middle East and Africa. Goodyear’s full-year 2014 net income was $2.4 billion, or $8.78 per share, but after adjusting for the full $2.2 billion tax credit and other items, the adjusted net income was $790 million, or $2.83 per share.