Goodyear returns to profit despite lower sales, volumes

Akron, Ohio – Goodyear Tire & Rubber Co. has returned to profit in 2024, reporting a net income of $70 million (€67 million) after a loss of $689 million in 2023.

The turnaround was driven by higher segment operating income, which rose by $350 million to $1.32 billion for the full year, Goodyear reported on 13 Feb.

Goodyear linked the increase in segment operating income to $480 million in gains from the Goodyear Forward transformation plan, which was introduced in 2023 to deliver $1.5 billion in annual run-rate business benefits and reduce leverage.

Earnings were also helped by $121 million from insurance proceeds, as well as an $86 million impact of improved pricing versus raw material costs.

These were partly offset by $220 million in increased inflationary costs and lower tire volume of $185 million.

Full-year sales declined to $18.9 billion, with tire unit volumes dropping to 166.6 million units in 2024.

Americas

In the Americas, Goodyear improved full-year segment operating income by 24.5% year-over-year to $933 million, with margins up from 6.2% to 8.5%.

Segment operating income was helped by the Goodyear Forward plan as well as a $52 million insurance claim, primarily related to the 2023 Tupelo storm.

Sales were down 8% to $11.0 billion for the year, primarily due to lower volumes and an unfavourable price/mix.

Full-year tire unit volumes in the region fell 6.5% year-over-year to 81.6 million units, driven by declines in replacement volume.

During the fourth quarter, tire unit volume decreased in the Americas by 4.8%, due mainly to a “significant” increase in imports of low-cost tires.

OE demand in the region grew 8.5% due to a low comparison base the year before, caused by automotive strikes in 2023.

EMEA

In Europe, the Middle East and Africa (EMEA), Goodyear reported a strong recovery, with segment operating income increasing to $108 million, up from $17 million the year before, while margins improved from 0.3% to 2.0%.

Segment operating income benefited from the Goodyear Forward plan and recovery from the fire at the Debica, Poland facility last year, which was partly offset by an unfavourable price/mix versus raw material costs.

EMEA sales declined 3.2% year-on-year to $5.4 billion, while volumes fell 2.0% to 48.9 million units.

During the fourth quarter, EMEA revenue grew 3.7% year-on-year to $1.5 billion, driven by increased tire volume and a favourable price/mix.

Tire unit volume during the quarter increased 1.5%. Replacement unit volumes increased 2.7%, reflecting strong winter tire demand in the consumer market. Original equipment unit volumes decreased 1.6%, reflecting lower OEM production.

Asia Pacific

In the Asia Pacific region, segment operating income grew 37% year-over-year to $277 million, on near-flat sales of $2.4 billion and volumes of 36.1 million units.

Goodyear linked the gains to the Goodyear Forward plan and lower costs in the region.

The final quarter of the year saw a 6.8% decline in sales to $606 million in the region, driven by lower replacement volume.

Tire unit volume during the quarter decreased 9.3%, reflecting a 17% decline in replacement demand and a flat OE market.