Goodyear posts €190m loss in second quarter

Akron, Ohio - Goodyear has posted a net loss of $208 million (€190 million) for the second quarter of 2023, compared to net profit of $166 million in the same period a year ago.

The tire maker linked its earnings reversal to lower sales volumes and “higher other expenses, driven by lower net gains on asset sales and higher pension costs.”

Second quarter sales fell 6.6% year-on-year, as lower volumes and the impact of foreign exchange were only partly offset by stronger price/mix, noted Goodyear’s 2 Aug report.

Tire unit volumes totalled 40.8 million units, down 10.7% from prior year levels, with a stronger US dollar reducing sales by around 2%, added the Akron group.

An expected improvement in earnings from the first quarter failed to materialise due largely to weaker industry volumes in consumer replacement, particularly in Western markets.

Goodyear was also impacted by weaker-than-anticipated demand from the commercial truck industry, while overall price/mix missed its forecast due to disappointing commercial truck mix and volumes.

“Our second quarter results were marked by weak demand in Americas and EMEA, given consumer replacement channel destocking,” said Richard Kramer, CEO and president.

Additionally, continued Goodyear’s leader, the US and European commercial replacement industry” weakened considerably” in the second quarter.

During the period, he said, “freight ton miles and utilisation drove channel destocking, resulting in lower overall mix in our business.”

With regard to full-year prospects, Kramer said: “Based on first half trends, we have downgraded our industry outlook in the second half for both consumer replacement and commercial replacement.”

On the other hand, Goodyear expects second half costs to come lower than previously forecast: helping to improve segment operating margin in the remaining six months of 2023.

“Additionally, we expect two of our three business units--America and Asia Pacific—to record meaningful improvements in margin and exit the year with solid earnings heading into 2024,” concluded Kramer.