(Corrects paragraph 3 to say the company deconsolidated Venezuela operations last year and not “is in the process of deconsolidating”)
April 27 (Reuters) - Goodyear Tire & Rubber Co, the largest U.S. tire maker, reported a bigger-than-expected drop in quarterly revenue, hurt by lower tire sales in the Americas, its largest market.
Shares of the Akron, Ohio-based company were down nearly 8 percent at $30.18 in light premarket trading on Wednesday.
The Americas region includes Venezuela, which the company deconsolidated last year.
Deconsolidation under U.S. accounting rules allow companies to treat a subsidiary in a volatile foreign market as an investment rather than an operating unit, while writing down the market value of that subsidiary largely insulates the parent company from future hits to its financial results.
The deconsolidation of the Venezuelan subsidiary hurt tire volumes by about 0.4 million units and sales by $94 million in the first quarter, the company said.
Net income fell to $184 million, or 68 cents per share, in the quarter ended March 31, from $224 million, or 82 cents per share, a year earlier.
The year-ago results included a non-cash, one-time gain of $155 million, Goodyear said.
Excluding items, the company earned 72 cents per share, marginally above the average analyst estimate of 71 cents.
Revenue fell 8.3 percent to $3.69 billion and missed analysts’ average estimate of $3.92 billion. Revenue in the Americas declined 13 percent.
Up to Tuesday’s close, shares of the company had risen 18.2 percent in the past 12 months. (Reporting by Arunima Banerjee in Bengaluru; Editing by Savio D‘Souza and Maju Samuel)