Goodyear suffers double-digit drop in operating income

Akron, Ohio – Goodyear Tire & Rubber Co. has suffered double-digit declines in segment operating income for both fiscal 2018 and the fourth quarter.

The decline reflected, among other thing, higher raw material costs and weaker results from other tire-related businesses, the tire maker said in its annual results statement 8 Feb.

Segment operating income for the year fell 18.1% to $1.27 billion (€1.12 billion) on 0.6% higher sales of $15.5 billion.

Goodyear said unfavourable foreign currency translation affected the results.

That was, however, partially offset by net cost savings and improved overhead absorption.

Sales growth was driven by improvements in price/mix, offset partially by unfavourable foreign currency translation.

Goodyear reported tire unit volumes of 159.2 million, unchanged from the prior year.

Replacement tire shipments edged up 1%.

Additionally, growth in Europe was offset by weakness in Brazil and China.

"Our teams delivered several operational wins in 2018,” said chairman, CEO and president Richard Kramer commenting on the results.

Some of the achievements, he added, included increasing consumer replacement volume and securing OE fitments, notably on future electric vehicles.

The company also achieved several "strategic objectives" that he said "strengthen our connected business model and move us closer to our customers.”

"While many of the macro challenges we faced in 2018 have extended into 2019, we continue to build on what we accomplished last year,” he concluded.

Goodyear’s operating income in Americas fell for the full year by 22.8% to $654 million, on 0.5% lower sales of $8.17 billion.

Operating income dropped slightly in Europe, Middle East and Africa both for the quarter and for the year.

In the Asia-Pacific segment, operating income declined 24.8% to $257 million for the full year.