RJR Nabisco, Goodyear Issue Profit Warnings

RJR Nabisco Holdings Corp. and Goodyear Tire & Rubber Co. on Tuesday joined a long list of large companies issuing profit warnings.

RJR, the New York-based food and tobacco conglomerate, said its third-quarter profit would fall 20% to 23% short of Wall Street expectations because of depressed market conditions in Russia and elsewhere.

In its announcement after the close of trading, RJR said it expects third-quarter earnings to range between 46 cents and 48 cents per fully diluted share.

Analysts on average had estimated RJR would earn 60 cents a share, according to First Call Corp., which tracks such forecasts.

Goodyear, meanwhile, forecast disappointing third-quarter results because of economic turmoil in Asia and Latin America and a summer strike at General Motors Corp. Its stock fell 7% in response.

Goodyear said results were also hurt by a strong dollar and the cost of converting some plants in North America to seven-day operations.

The 100-year-old company said it lowered its forecast about 35 cents a share and now expects earnings from continuing operations of $180 million to $190 million, or $1.15 to $1.20 a share for the quarter.

According to First Call, analysts’ median estimate for Goodyear’s third-quarter was $1.22 a share before the announcement.

In the year-ago third quarter, Goodyear had operating earnings of $333.5 million, or $1.16 a share, on sales of $3.32 billion.

It said results will include a gain of 20 cents a share from the sale of property in North America, Latin America and Asia.

The Akron, Ohio-based company’s stock fell $3.75 to close at $52 on the New York Stock Exchange.

RJR’s stock sank $1.94 to $25 in after-hours trading on the Instinet electronic trading system with analysts predicting a further drop today. It had finished Tuesday’s Big Board session down 6 cents at $26.94.

RJR said it expected overall third-quarter profit to be dragged down by a reduction in earnings of its Reynolds International unit and by a higher corporate tax rate for the remainder of the year.