Goodyear reports drops in H1 sales, operating income

Akron, Ohio – Goodyear has reported 32.4% year-on-year decline in operating income for the first half 2019, due in part to higher raw material costs.

Operating income in the first half decreased from $605 million (€543 million) in 2018 to $409 million in 2019, the Akron-based company reported 26 July.

Goodyear also reported a net loss of $7 million for the first six months of 2019, compared to net income of $232 million in the same period of 2018.

The company cited “several significant items”, including $107 million in rationalisation charges, related to the previously announced plan to modernise two of tire manufacturing facilities in Germany.

First half 2019 adjusted net income was $103 million, compared to $272 million in 2018.

First half sales fell to $7.2 billion, a 6% decline from the 2018 period due to unfavorable foreign currency translation, lower volume and reduced sales from other tire-related businesses.

These factors were partially offset by improvements in price/mix, Goodyear reported.

Sales in both the European, Middle East and Africa segment and the Asia Pacific segment dropped 9% and 8% in the quarter

"I am encouraged that several of the external factors that have impacted our business in recent quarters are beginning to moderate, positioning us to deliver stronger results going forward," said CEO and president Richard Kramer.

In its financial report, Goodyear said its OE win rates over the last 18 months have increased significantly.

This, the company said, reflected industry trends toward vehicles with more complex tire constructions.

Based on that, Goodyear said it expects OE volume to increase approximately 20% between 2019 and 2022 based on industry projections for auto production.

These new fitments, expected to include a significant percentage of high-value electric vehicle fitments, will provide a higher average revenue per tire than existing volume, Goodyear said.