Goodyear America’s sales and profit fall in Q2 and H1
Goodyear Tyre and Rubber, the largest tyre maker in the US, reported lower-than-expected quarterly sales due to declining tyre demand. The company lowered its full-year forecast for segment operating income based on the results.
The tyre maker recorded Q2 2017 net income of $147 million (58 cents per share), down from $202 million (75 cents per share) in the year-ago quarter. Adjusted net income for the quarter was $177 million (70 cents per share), down from $314 million ($1.16 per share) in 2016. Q2 operating income was $361 million in 2017 down from $531 million a year ago. The decrease reflects higher raw material costs and the impact of lower volume.
Tyre unit volumes for the quarter totaled 37.4 million, down 10% from 2016 primarily in Europe, the Middle East, Africa and the Americas. Replacement tyre shipments were down 11%. Original equipment unit volume was down 8%. Goodyear’s H1 2017 sales were $7.4 billion, down 2% from the 2016 period, reflecting lower tyre unit volume. Year-to-date net income of $313 million ($1.23 per share) is down from $386 million ($1.43 per share) in H1 2016. H1 segment operating income reached $746 million in 2017, down from $950 million a year ago. Tyre unit volumes for the half totaled 77.4 million, down 7% from 2016. Replacement tyre shipments dropped 6%, reflecting increased competition.
Original equipment unit volume was down 8%, driven by lower auto production, the company said. Richard Kramer, Goodyear’s chairman and CEO, said: “In light of the challenging global marketplace in the first half of 2017, we have lowered our segment operating income expectations for the remainder of the year. Despite the near-term challenges, I am no less optimistic about our ability to drive our strategic priorities against the favorable industry megatrends.”