Akron, Ohio – Goodyear Tire & Rubber sounded an upbeat note about this year’s prospects despite reporting a ‘segment operating loss’ of $14 million for 2020.
The operating loss, on net sales down 16% year-on-year to $12.3 billion, contrasted starkly with operating earnings of $959 million posted a year ago.
The US tire maker linked the earnings reversal to “lower volume, reduced factory utilisation and lower earnings from other tire-related businesses.”
Tire unit volumes fell 19% year-on-year to 126.0 million – replacement sales down 17%, OE down 23% - as demand slumped due to disruption caused by the Covid-19 pandemic.
There was better news from the fourth quarter, Goodyear reporting segment operating income of $302 million, up 25% on a year ago
The gains, it said, were largely due to cost-savings via ongoing rationalisation plans, lower raw material costs and better price/mix.
Final quarter sales, however, came in 2% down year-on-year to $3.7 billion, on lower volume and unfavourable currency translation.
Tire unit volumes totaled 37.7 million, down 5% – replacement sales down 7% but OE up 3% – from the prior-year. as demand continued to be affected by the pandemic.
“We delivered strong performance to end a challenging year,” said Goodyear chairman, CEO and president Richard Kramer, noting “good momentum as we enter 2021.”
Goodyear’s commercial business, he said, “continues to outperform the industry, our consumer replacement business is strengthening, and we are beginning to see the benefits of our robust consumer OE pipeline.”
Concluded Kramer: I am confident we are positioned to capitalise on stronger industry fundamentals in 2021.”