Akron, Ohio — Goodyear has lowered its second-half and fiscal 2018 earnings outlook by roughly 20% due to higher-than-expected increases in raw materials costs, unfavorable foreign currency swings and softening market conditions in China.
The revised outlook comes despite a "strong" second-quarter operating performance, during which Goodyear achieved its price/mix and net cost savings goals and higher revenue and unit sales, but also reported lower operating income.
"While our execution in the period was robust, macro headwinds are intensifying," Chairman, CEO and President Richard Kramer said, "including rising raw material costs, a stronger US dollar and softening market conditions in China."
Kramer said Goodyear is adjusting its plans "accordingly to mitigate the impact of these challenges over the intermediate-term" and that he remains confident that the company can deliver on its 2020 financial goals because of its strengthening position in the marketplace and value created through strategic initiatives.
Regarding the outlook, Kramer said Goodyear expects 2018 segment operating income of between $1.45 billion (€1.24 billion) and $1.5 billion, down from previous forecasts of $1.8 billion to $1.9 billion.