Goodyear Tire & Rubber Co. experienced a net loss of $34 million during the third quarter of 2024, but posted gains in other areas.
The Akron, Ohio-based tiremaker’s adjusted net income during the quarter totaled $105 million, compared to adjusted net income of $104 million posted during the same period in 2023.
Goodyear’s third quarter segment operating income was $347 million, an increase of $11 million from the same period in 2023.
According to a statement from Goodyear, “the third quarter of 2024 included several significant items including, on a pre-tax basis, an intangible asset impairment of $125 million, Goodyear Forward costs of $25 million and rationalization charges of $11 million.
“The third quarter of 2023 included pre-tax rationalization charges of $198 million. The intangible asset impairment includes a significant reduction in the carrying value of the company’s tier-three Mastercraft and Roadmaster brands, given lower volume as a result of increased competition in opening price points in the U.S. market and plans under Goodyear Forward to increase overall profitability.”
First nine months
Goodyear’s sales for the first nine months of 2024 were $13.9 billion with tire unit volumes totaling 123 million.
During the first nine months, Goodyear experienced a net loss of $6 million compared to a net loss of $398 million during the same period last year.
The company also posted net income of $189 million during the first three quarters of 2024 versus an adjusted net loss of $75 million recorded during the same period in 2023.
And it achieved segment operating income of $933 for the first nine months, up some $348 million on a year-over-year basis.
“The year-over-year improvement was driven by increases in segment operating income,” according to Goodyear officials.
“The first nine months of 2024 also included several significant items, including, on a pre-tax basis, an intangible asset impairment of $125 million, Goodyear Forward costs of $92 million, rationalization charges of $52 million and a benefit of $87 million from asset and other sales.
Goodyear officials say the increase in segment operating income “reflects benefits of $285 million from the Goodyear Forward transformation plan, $235 million from net price/mix versus raw material costs, $69 million from insurance proceeds, net of current year expenses and $55 million from the 2023 negative impact of the Tupelo storm.” Goodyear’s Tupelo plant suspended production temporarily in early 2023 after being hit by a tornado.
“These were partially offset by lower tire volume of $143 million and a net headwind of $116 million from inflationary costs. First nine months 2024 total cash flows from operating activities was a use of $591 million compared with a use of $204 million in the first nine months of 2023.”
Americas performance
Sales in Goodyear’s Americas region during the third quarter of 2024 totaled $2.9 billion, down 8.4% from the same period last year.
The decrease was driven “by declines in replacement volume,” including a tire unit volume drop of 8.3% and a replacement tire volume decline of 11.3%, according to Goodyear officials.
The decline in replacement units reflects “industry member declines in the U.S. and actions taken to reduce exposure in the low-end of the market,” say Goodyear officials, who note that demand for what Goodyear calls “low-cost imported product grew significantly” during the third quarter.
In the original equipment channel, Goodyear’s volume increased 7.9% on a year-over-year basis during the third quarter.
“Original equipment unit volumes were up 7.9%, reflecting new fitment wins.”
Third quarter 2024 segment operating income of $251 million in Goodyear’s Americas region decreased $7 million from the prior year’s quarter.
“The decrease was driven by lower volume, inflation and unfavorable price/mix and raw material costs. These headwinds were largely offset by Goodyear Forward savings and insurance proceeds related to (Tupelo plant) storm damage in prior years.”
Other regions
In its Europe, Middle East and Africa (EMEA) region, Goodyear posted sales of $1.3 billion during the third quarter of 2024, down 1.9% on a year-over-year basis.
This was driven by volume declines and the “negative impact of changes in foreign currency exchange rates, partially offset by favorable price/mix.”
EMEA replacement tire volume declined by 2.1%, while OE volume in the region fell by 5.6%, reflecting a reduction in vehicle production.
“Third quarter 2024 segment operating income of $24 million was up $2 million compared to the prior year’s quarter. Segment operating income benefitted from the Goodyear Forward plan and favorable net price/mix versus raw material costs.”
In its Asia Pacific region, Goodyear’s sales declined by 4.6% on a year-over-year basis.
“Replacement tire unit volume decreased 13.0%, driven by declines in our key markets, including Australia, China and India. Original equipment unit volume increased 3.6%, driven by growth in EV fitments.
CEO remarks
“As a result of the consistent and strong execution of our Goodyear Forward transformation plan, we successfully achieved four consecutive quarters of segment operating margin expansion,” says Goodyear CEO and President Mark Stewart.
“These tangible results are not only a testament to the talent of our team, but also to the strong foundation of Goodyear.
“Throughout the company, we are delivering solid results. Due to the strong momentum underway, we are increasing our target for gross run-rate gains from Goodyear Forward to $1.5 billion by the end of 2025. This increase will enable us to realize significant year-over-year earnings benefits in both 2024 and 2025 from the program.
“We have raised our guidance for 2024 Goodyear Forward gross benefits to $450 million and we continue to expect an additional $750 million of year-over-year gross benefits in 2025.”
