Goodyear returned to profitability but its results frell short of Wall Street expectations. (Photo: AP)

Ohio, USA

Goodyear Tire & Rubber Co returned to profitability in its fourth quarter partly as it sold more higher-priced tyres after reporting a loss a year ago that included hefty costs tied to a plant closing.

But its results fell short of Wall Street expectations, and its shares fell more than seven per cent in morning trading yesterday.

The biggest US tyre maker also cautioned that global tire industry growth will be at a slower pace near term than previously predicted due to economic difficulties in several markets.

For the period ended December 31, Goodyear reported net income of US$18 million ($1.55 billion), or seven cents per share. That compares with a net loss of US$177 million, or 73 cents per share, a year ago.

Excluding one-time items in the latest period, Goodyear said that its earnings were three cents per share. Analysts expected earnings of 20 cents per share, according to a FactSet survey.

The prior-year period included a US$160 million charge tied to its plans to close a plant in Union City, Tenn.

Quarterly revenue increased 12 per cent to US$5.68 billion from US$5.07 billion partly on higher tire prices, but tire unit volumes dropped five per cent on difficulties in Latin America, flooding in Thailand and declining replacement industry volumes in mature markets.

The revenue performance missed Wall Street’s estimate of US$5.86 billion.

Goodyear said that revenue per tire rose 19 per cent for the quarter, taking out the effects of foreign currency translation.

A focus on high-end tires helped Goodyear increase revenue per tire by 17 per cent for 2011.

“Our price-mix strategy was critical to our ability to offset record high raw material costs and the success of that strategy continued through the end of the year,” chairman and CEO Richard Kramer told analysts in a conference call.

Its shares fell US$1, or 7.2 per cent, to US$12.97 in morning trading. Its shares are still up 52 per cent from their 52-week low of US$8.53 in early October. They peaked for the year at US$18.83 in early May.

For the year, Goodyear reported net income of US$321 million, or US$1.26 per share. In the previous year it lost US$216 million, or 89 cents per share.

The Akron, Ohio company’s annual revenue rose 21 percent to US$22.77 billion from US$18.83 billion.