April 29, 2014 / 1:30 PM / 4 years ago

UPDATE 2-Severe winter hits Goodyear Tire's profit

* First-quarter revenue falls 8 pct to $4.47 billion vs est $4.80 bln

* Adjusted earnings $0.56/shr vs est. $0.60

* Shares fall as much as 9 pct (Adds CEO comment, background, details, updates shares)

By Rohit T. K.

April 29 (Reuters) - Goodyear Tire & Rubber Co reported a lower-than-expected quarterly profit as an unusually severe winter in North America slowed production and kept customers away from distributors.

The biggest U.S. tire maker’s shares fell as much as 9 percent in morning trading on Tuesday.

The harsh winter hit Goodyear because it ships tires only when automakers book sales, Chief Executive Richard Kramer said on a conference call with analysts.

U.S. auto sales fell in January and February, before rising in March, as cold weather and snow kept many consumers away from dealer showrooms.

Apart from selling to automakers, Goodyear supplies the replacement market.

Goodyear also said volatile economic conditions in Venezuela, along with a labor dispute at a plant in the country, had led to a slight fall in production there.

“While the situation in Venezuela will remain volatile, we expect our volumes to increase in the second quarter, given the conclusion of our labor negotiations,” Kramer said.

Venezuela accounted for about 2 percent of the company’s revenue in 2013.

Goodyear reported a net loss attributable to shareholders of$58 million, or 23 cents per share, in the first quarter ended March 31, compared with a net profit of $26 million, or 10 cents per share, a year earlier.

Excluding a $132 million charge related to a drop in the value of the Venezuelan bolivar and other items, Goodyear earned 56 cents per share, missing the average analyst estimate of 60 cents, according to Thomson Reuters I/B/E/S.

Total revenue fell 8 percent to $4.47 billion, falling short of the average estimate of $4.80 billion. Revenue from North America - which accounts for more than 40 percent of the company’s total revenue - fell 13 percent.

Unfavorable foreign exchange rates reduced revenue by $126 million in the quarter, mainly due to the weaker bolivar, Brazilian real and Australian dollar, Chief Financial Officer Laura Thompson said on the call.

Goodyear, which also makes tires for aircraft and NASCAR racing cars, said North American sales volume fell 1 percent.

Akron, Ohio-based Goodyear said total tire unit volumes rose 1 percent to 40 million - its slowest growth in three quarters.

French rival Michelin reported lower quarterly revenue last week, saying weaker prices and emerging market currencies outweighed sales volume growth.

Michelin also said it faced tough price competition from Goodyear and Japan’s Bridgestone Corp.

The company’s shares were down 7.1 percent at $25.21 in afternoon trading on the Nasdaq. Up to Monday’s close, the shares had risen 14 percent since the start of the year. (Additional reporting by Mridhula Raghavan; Editing by Saumyadeb Chakrabarty)

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