AKRON, OH — Goodyear Tire & Rubber said today it expects to report second quarter 2004 sales of about $4.5 billion, compared to $3.8 billion in the prior-year period.
All seven Goodyear businesses, including North American Tire, expect to report positive segment operating income in the second quarter.
“Our second quarter results will reflect higher sales in all of our businesses, improved pricing and product mix, as well the impact of our turnaround initiatives,” said Robert Keegan, Goodyear chairman and CEO. “While we are pleased with our year-to-date operating results, challenges remain, including high levels of debt and unfunded pension obligations, which we are addressing with specific strategies.”
Goodyear also announced that it intends to refinance its $680 million senior secured U.S. revolving credit facility, which matures on April 30, 2005. The new $500 million senior secured funded credit facility, which Goodyear expects to mature in 2007, will be secured by the same collateral as the $680 million senior secured U.S. revolving credit facility it replaces.
The transaction is subject to market conditions and the execution of definitive documentation and is expected to close in August.
Additionally, the company said it has completed its exploration into the possible sale of its chemical business, determining that the business remains more valuable to the company and its stakeholders if retained than if sold.
“Given its improved earnings, we believe the cash flows and cost advantages Goodyear derives from the chemical business, as well as its positive contributions to the tire businesses, outweigh the benefits of a potential sale,” Keegan said. “The current and projected raw material market reinforces this decision.”
Goodyear will report full second quarter financial results on Thursday, August 5, followed by an investor conference call at 9 a.m.
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