Goodyear sees earnings recovery in Europe

Akron, Ohio – Goodyear Tire & Rubber has reported a slight recovery in its fourth quarter earnings across Europe, Middle East and Africa (EMEA).

Segment operating income came in at $6 million (€5.5 million), up from a loss of $80 million reported for the same quarter last year, Goodyear announced 12 Feb.

The results were driven by net price/mix effect of $62 million and a $108 million decrease in cost of raw materials.

The benefits, Goodyear said, were offset partly by the impact of lower volume, including $6 million lower sales and $27 million unabsorbed overhead from lower production.

Furthermore, the US tire maker said it saw a $27 million increase in cost of inflation, while a fire at its factory in Debica, Poland had a $12 million impact on earnings.

The earnings recovery was also in the context of a ‘low comparison base’ last year, Goodyear said, noting that the results were still impacted by “continued destocking” in the replacement consumer tire segment.

According to Goodyear, the European consumer replacement tire industry grew in the quarter driven by low-cost imports.

The US group’s consumer replacement volume, however, fell 5%, amid channel destocking, while commercial truck tire volumes decline 11% year-on-year reflecting “weak industry conditions”.

Goodyear’s sales in EMEA rose 2.6% year-on-year to $1.4 billion during the quarter, reflecting a 2% higher revenue per tire.

In 2022, Goodyear EMEA reported 74.5% year-on-year decline in operating income, to $61 million, on net sales of about $5.6 billion.

For the first nine months of 2023, EMEA segment operating income collapsed to $11 million over the first nine months – from $141 million in the same period of 2022 – on sales about level at $4.2 billion.