Goodyear reports higher earnings, lower sales in first quarter

Akron, Ohio – Goodyear has more than doubled its first quarter operating income despite lower sales for the period ended 31 March.

Segment operating income came in at $247 million (€230 million), up from $122 million in the same three months of last year, Goodyear reported 6 May.

Sales for the first quarter came in 8% lower year-on-year at $4.5 billion, as volumes declined 3.3% to 40.4 million units.

The Akron-based tire maker narrowed its first-quarter net loss to $57 million, from $101 million reported for the same period last year.

The group linked the increased segment operating income to a $127-million price/mix effect and a $72-million contribution from the Goodyear Forward strategic plan.

The gains were partly offset by the impact of net inflationary costs of $33 million and lower tire volumes of $28 million.

Regionally, Goodyear significantly improved segment operating income in Americas to $179 million, up from $79 million reported last year.

The increase was driven by “lower transportation costs,” the effects of Goodyear Forward initiatives, and a favourable net price/mix versus raw material costs.

Sales in the region were down 9.7% year-on-year at just under $2.6 billion, driven by lower replacement volumes.

Also impacting sales was an “unfavourable” price/mix trend “due to continuing industry weakness in commercial truck and contractual price adjustments.”

Americas tire unit volume decreased 7.4% overall, reflecting a 9.2% decrease in the replacement segment and a flat OE demand.

The decline in replacement, noted Goodyear, reflected ‘significant growth’ in ‘non-US players’ in the industry generally representing low-cost imported products.

First quarter 2024 segment operating income of $179 million increased $100 million from the prior year's quarter.

In Europe, Middle East and Africa (EMEA), Goodyear’s operations were on a par with last year, reporting a flat operating income of $8 million for the quarter.

Sales in the region were down 9.7% year-on-year at $1.35 billion, driven by lower replacement volumes and unfavourable price mix.

Volumes also decreased 5.2% in the EMEA region, reflecting a flat OE development and a 7.1% decrease in the replacement market.

The tire maker reported growth in Asia-Pacific with sales up 3.4% year-on-y7ear to $602 million, driven by higher OE volumes.

Tire unit volume increased 10.0% as OE demand grew 26.7%, due mainly to EV fitments in China.

Replacement tire unit volume decreased 1.6%, reflecting industry declines.

First quarter segment operating income in the Asia -Pacific region reached $60 million, up $22 million from the year before.

Earnings in Asia benefited from “favourable net price/mix versus raw material costs, higher volume and benefits from the Goodyear Forward plan.”