Goodyear reports return to profit as sales rise 42%

Akron, Ohio – The Goodyear Tire & Rubber Co. returned to profit in the year 2021, helped by its acquisition of Cooper Tire & Rubber Co. earlier in the year.

Net sales were up 42% year-on-year at $17.5 billion (€15.4 billion), primarily due to the Cooper Tire merger, higher volume, improvements in price/mix and increased sales from other tire-related businesses, said Goodyear 11 Feb. 

Segment operating income rose $1.3 billion year-on-year to $1.3 billion, said the US tire maker linking the growth to a number of factors.

The factors, Goodyear said, include improvements in price/mix; the impacts of higher volume, including increased factory utilisation; the Cooper Tire merger; higher earnings from other tire-related businesses; and the benefits of cost saving actions. 

The gains, however, were partially offset by higher raw material prices as well as costs involved with cost saving measures.

Furthermore, Goodyear said profits were impacted by inflationary cost pressures in wages, benefits, transportation, and energy as well as an increase in US manufacturing costs related to higher employee turnover. 

Over the full year, Goodyear reported a total volume sales of 169.3 million units, up 34% from 2020. 

Replacement tire shipments increased 41%, reflecting additional tire unit volume related to the Cooper Tire merger, which closed in June last year. 

Original equipment volume increased 13%, driven by higher global vehicle production in the second quarter and market share gains.

"We achieved our highest fourth quarter revenue in nearly 10 years as demand for our products remained strong and we captured higher selling prices,” said Richard Kramer, chairman, CEO and president. 

“With the addition of Cooper Tire, our merger-adjusted segment operating income was significantly above last year and over 60% higher than fourth quarter 2019.” 

Looking ahead, he said, Goodyear expects inflationary pressures to persist over the next several quarters. 

"We remain focused on executing strategies to capture value in the marketplace and managing our costs,” continued Kramer.

Breaking down the regions, Goodyear said fourth quarter sales in Europe, Middle East and Africa increased 16% from last year to $1.4 billion, primarily due to improvements in price/mix and the Cooper Tire merger. 

Tire unit volumes increased 11%, reflecting a 24% rise in replacement tire unit sales.

Over the 12-month period, Goodyear’s sales in the region were up 30% at $5.2 billion, on 18.5% higher volume sales at 52.7 million units.

Full year segment operating jumped from a loss of $72 million to $239 million, despite a 40% decline in fourth quarter operating income to $41 million. 

Goodyear linked the drop in EMEA operating income in the fourth quarter to higher raw material costs and inflationary cost pressures in wages, benefits, transportation and energy. 

These factors, it said, were partially offset by improvements in price/mix and the impact of higher volume, including increased factory utilisation.