(Reuters) - Goodyear Tire & Rubber Co (>> Goodyear Tire & Rubber Co) reported a higher-than-expected quarterly profit as its sales volumes in the Europe, Middle East and Africa (EMEA) region recovered after more than a year of decline and its raw material costs fell.

Shares of the No.1 U.S. tire maker rose as much as 9 percent in morning trading on Tuesday.

Goodyear's sales volume in EMEA rose 11 percent in the fourth quarter, driven by strong demand for replacement tires. The region accounts for nearly a third of the company's total revenue.

"We are positive on EMEA's long-term potential and we believe stronger margins are achievable in the competitive EMEA market," Chief Executive Richard Kramer said on a conference call.

The company, which is facing stiff competition in Europe from Michelin (>> Michelin (CGDE)), Continental AG (>> Continental AG) and Pirelli (>> Pirelli & C. SpA), has been moving some operations to lower cost centres in EMEA.

Goodyear has also benefited from lower oil and rubber prices, with its cost of goods sold declining 8 percent in the quarter. The company, whose brands include Dunlop and Fulda tires, expects raw material prices to fall further by 5 percent this year.

Brent crude prices nearly halved from a year earlier in the fourth quarter and rubber prices fell 4 percent.

Goodyear said it expected to spend $700 million on restructuring between 2014 and 2016, higher than the $600 million it had estimated earlier.

DOLLAR PINCHES

Goodyear reported a net loss of $380 million, or $1.42 per share, attributable to shareholders for the quarter ended Dec. 31, hurt by a charge related to its Venezuela operations.

Excluding items, the company earned 93 cents per share, handily beating the average analyst estimate of 75 cents, according to Thomson Reuters I/B/E/S.

Revenue declined 6.7 percent to $4.06 billion, hit by a strong dollar, but beat analysts' expectations of $4.01 billion.

Goodyear, which also makes tires for aircraft and NASCAR racing cars, said its tire volumes rose 7 percent, partly helped by the acquisition of Nippon Goodyear Ltd in Japan.

The company's shares were up 5.6 percent at $27.82 in late morning trading.

(Reporting by Arunima Banerjee and Shashwat Awasthi in Bengaluru; Editing by Kirti Pandey)

By Arunima Banerjee and Shashwat Awasthi