Goodyear Tire & Rubber Co. posted sales of $4.6 billion and segment operating income of $339 million during the second quarter of 2024.
Goodyear lost $208 million in sales during the same period last year.
The company’s segment operating income total is $215 million more than it reported during the same period in 2023.
Goodyear officials say the quarterly sales gain was driven by “increases in segment operating income."
This reflects "benefits of $99 million from price/mix versus raw materials; $90 million from the Goodyear Forward transformation plan; $63 million from insurance claim recoveries, net of related expenses; and $50 million from the 2023 negative impact of the Tupelo storm.”
Goodyear’s Tupelo, Miss., plant was taken off-line in early-2023 by a tornado.
“These were partly offset by the impact of lower tire volume of $41 million and unfavorable fixed overhead absorption of $35 million.”
The Akron, Ohio-based tiremaker’s total units totaled 40.1 million during 2Q 2024.
Year-to-date results
Goodyear's sales for the first six months of 2024 were $9.1 billion with tire unit volumes totaling 80.5 million.
First-half 2024 net income was $28 million “compared to a Goodyear net loss of $309 million ... a year ago.
“The year-over-year improvement was driven by increases in segment operating income. The first half of 2024 also included several significant items, including, on a pre-tax basis, Goodyear Forward costs of $67 million; rationalization charges of $41 million; and a benefit of $86 million from asset and other sales."
The company reported segment operating income of $586 million for the first six months of 2024, up $337 million from a year ago.
“The increase in segment operating income reflects benefits of $227 million from price/mix versus raw materials; $162 million from the Goodyear Forward transformation plan; $52 million from insurance claim recoveries, net of related expenses; and $50 million from the 2023 negative impact of the Tupelo storm.
“These were partially offset by lower tire volume of $69 million, a net headwind of $58 million from higher inflationary costs and unfavorable fixed overhead absorption of $33 million,” say Goodyear officials.
Americas results
In the Americas, Goodyear’s largest region, second quarter 2024 sales totaled $2.7 billion, an 8.2% drop from the same period in 2023.
Goodyear officials attribute the decline to “lower replacement volumes and unfavorable price/mix due to continuing weakness in commercial truck and contractual price adjustments.”
Tire unit volume in the Americas decreased by 5.9% during the quarter, with replacement tire unit volume falling by 8.6% thanks to “industry member declines in the U.S., a transitory impact from distribution changes in Latin America and flooding in Brazil earlier in the quarter.”
However, Goodyear’s original equipment unit volume increased 6.7% compared to the second quarter of 2023.
Second quarter 2024 segment operating income in the Americas totaled $241 million, an increase of $138 million from the prior year's quarter.
But benefits were “partly off-set by lower volume. Segment operating income also included $20 million of insurance claim recoveries, primarily related to the 2023 Tupelo storm.”
Other regions
In its EMEA (Europe, Middle East and Africa) region, Goodyear posted second quarter 2024 sales of $1.3 billion, down 4.6% year-over-year, “primarily driven by the negative impact of changes in foreign currency exchange rates.”
Second quarter 2024 segment operating income in EMEA came to $35 million, up $54 million compared to the prior year's quarter.
Goodyear’s second quarter sales in its Asia Pacific region grew 1.2% to $594 million thanks to 32.2% higher OE channel volume versus the same period last year, mainly driven by EV fitments in China.
“Second quarter 2024 segment operating income of $63 million was up $23 million from prior year, driven by higher volume, favorable net price/mix versus raw material costs,and benefits from the Goodyear Forward plan. These factors were partly off-set by higher inflationary costs.”
Goodyear Forward
As part of its Goodyear Forward plan, the Akron, Ohio-based company is selling its OTR tire business unit to Yokohama Rubber Co. Ltd.
The $905 million cash transaction is expected to close in early-2025.
“The sale of the OTR business marks an important milestone as we continue to execute against our Goodyear Forward transformation plan,” said Mark Stewart, CEO and president of Goodyear, when the sale was announced last week.
“We are grateful to our OTR colleagues who have driven the success of the business and are committed to working closely with Yokohama to ensure a smooth transition for customers and associates.”
In November, Goodyear said its OTR business produced annual revenue of approximately $700 million.
In its announcement of the sale, Yokohama said the Goodyear OTR tire operation, which includes tires for the mining and construction industries, had total sales of $678 million in fiscal 2023.
Also as part of Goodyear Forward, the Akron, Ohio-based tiremaker wants to sell its Dunlop brand and chemical division.
