Goodyear: Raw material prices drive down income in Q1 2018
Goodyear Tire & Rubber reports that its sales in the first quarter of 2018 were, at US$3.8 billion, four per cent higher than those a year earlier, even though tyre unit volumes were down 2.5 per cent year-on-year to 39 million. Segment operating income was down in the first quarter, however, declining 28 per cent from $390 million a year ago to $281 million. Goodyear says this decrease was driven by the impact of higher raw material costs.
Original equipment unit volume was down four per cent, primarily driven by declines in the below 17-inch rim size segment in the Europe, Middle East and Africa’s (EMEA) region. Replacement tyre shipments were down two per cent, largely due to reduced industry demand for consumer tyres in the US and Europe.
Goodyear’s first quarter 2018 net income was $75 million ($0.31 per share), down 55 per cent from $166 million (65 cents per share) a year ago. First quarter 2018 adjusted net income was $122 million ($0.50 per share), compared to $189 million ($0.74 per share) in 2017. Per share amounts are diluted.
“We are pleased with our first quarter results given higher raw material costs and weaker demand than we expected in the quarter,” said Richard J. Kramer, chairman, chief executive officer and president. “These results were highlighted by our performance in the 17-inch-and-larger segment in consumer replacement, which delivered more than double the industry growth in the US and Europe,” he added.
Further information about Goodyear Tire & Rubber’s Q1 2018 financial results can be read here.