Goodyear: Q3 2018 results
Goodyear Tire & Rubber has reported Q3 2018 sales of US$3.9 billion, slightly up on a year earlier; improved volume, price/mix and higher sales in other tyre-related businesses were “substantially offset” by unfavourable foreign currency translation.
Tyre unit volumes in the three months to 30 September 2018 totalled 40.5 million, up two per cent from the same period in 2017. Replacement tyre shipments increased four per cent, driven by strength in the Americas and EMEA regions. Original equipment unit volume decreased four per cent, primarily driven by lower consumer demand in China.
Goodyear’s third quarter 2018 net income was $351 million ($1.48 per share), up from $129 million (50 cents per share) a year ago. The increase was primarily driven by a $287 million net gain resulting from the company’s TireHub transaction, which was completed during the quarter. Third quarter 2018 adjusted net income was $163 million (68 cents per share), compared to $177 million (70 cents per share) in 2017.
The company reported segment operating income of $362 million in 2018, virtually flat with $367 million a year ago.
Kramer: performance relatively stable in period of increasing volatility
“We continued to improve the operating performance in our key mature markets, driven by strong volume growth, including significant increases in the more profitable 17-inch-and-greater rim sizes in the US and Europe,” said Richard J. Kramer, chairman, chief executive officer and president. “These gains contributed to the improving momentum in our two largest segments, as EMEA delivered operating income growth of more than 20 per cent and Americas turned in its best year-over-year performance since 2016.”
“We are pleased to see that in total, our operating performance was relatively stable in a period of increasing volatility. The issues that began to emerge in the second quarter have persisted – including a stronger US dollar and deteriorating market conditions in China. Additionally, newly enacted emission standards in Europe, growing economic volatility in Latin America, and a changing global trade environment have added incremental challenges for the industry. We have successfully navigated through similar conditions in the past, and I am confident that our strategic plan and the investments we are making are improving our long-term competitive position.”
Goodyear has revised its expectations for 2018 segment operating income to “reflect the increasingly challenging industry environment.” It has thus pared back its expectation for segment operating income from the $1.45 billion and $1.5 billion announced in July to somewhere above $1.3 billion. The tyre maker comments that this revised outlook reflects the impact of higher raw material costs, which includes the negative impact of transactional currency headwinds, further industry weakness in China and economic volatility in Brazil.
Click here for further information about Goodyear’s Q3 2018 financial results.