Goodyear ‘outperforms’ industry with strong Q1 results

Akron, Ohio – The Goodyear Tire & Rubber Co. has seen its first quarter results improve significantly year over year, helped by higher volumes and cost-cutting measures.

Sales for the first three months of 2021 were up 15% at $3.5 billion (€2.9 billion), driven by higher volume, improvements in price/mix and favourable foreign currency translation.

Tire unit volumes totaled 35.0 million, up 12% from the last year, as Covid impact on demand "moderated".

Replacement tire volume increased 14%, reflecting both continuing industry recovery and market share gains. Original equipment unit volume increased 5%, driven by higher vehicle production in Asia Pacific and increased market share in EMEA.

Goodyear’s first quarter net income was $12 million compared to a net loss of $619 million a year ago. Adjusted net income was $102 million compared to an adjusted net loss of $140 million in 2020.

The tire maker said the three-month period included several significant items, including, rationalisation charges of $50 million associated with a plan to reduce selling, administrative and general expense in EMEA and the modernisation of two manufacturing facilities in Germany.

The severe winter storm in the US had a negative impact of $23 million on net income, Goodyear added.

The company reported segment operating income of $226 million in the first quarter of 2021, up from an operating loss of $47 million reported last year.

The increase, Goodyear, said primarily reflects the impacts of higher volume, including increased factory utilisation, improvements in price/mix, cost-saving and lower raw material costs.

In terms of regions, Goodyear sales increased 24% to $1.2 billion in Europe, Middle East and Africa, with tire unit volumes up 10%.

In North America, sales were up 7% at $1.8 billion, reflecting a 7% increase in volumes. 

Sales in Asia Pacific also rose 27% to $493 million, helped by a 29% higher volume and favourable foreign currency impact. 

“We delivered impressive segment operating income, which was significantly above first quarter 2020 results and also nearly 20% higher than first quarter 2019,” said Richard Kramer, chairman, chief executive officer and president.  

The company, he said, achieved these results despite the impact of a severe winter storm in the US and industry supply chain challenges during the quarter.

“By leveraging improved distribution and new products, we outperformed the industry while expanding margins,” he concluded.