Goodyear: Drop in OE demand muzzles H1 2019 performance
There’s little good news to be found in the latest financial results from Goodyear Tire & Rubber. Sales and unit volumes were lower in the first half of this year, respectively dropping 5.7 per cent to US$7.2 billion and 3.3 per cent to 75.4 million units. The tyre maker also reported a net loss of US$7 million for the six months to 30 June 2019, a contrast to the net income of $232 million announced a year earlier; this result includes several significant items, most notably $107 million in rationalisation charges that are primarily related to modernisation plans and layoffs at two tyre plants in Germany.
Net sales for the second quarter of the year were $3.6 billion, 5.4 per cent less than in Q2 2018; Goodyear says this year’s result was driven by unfavourable currency translation, lower volume, and reduced sales from other tyre-related businesses, and partially offset by improvements in price/mix. Tyre unit volumes were, at 37.4 million units, down 4.1 per cent. The reduction in unit volumes was driven by an 11 per cent drop in original equipment volumes, with all regions reporting lower volumes.
In spite of these setbacks, Richard Kramer’s glass remains half full. The chairman, chief executive officer and president commented: “Our U.S. consumer replacement and commercial businesses continued to perform well in a challenging environment. We have continued our focus on strengthening our business by investing in premium supply and enhancing our OE pipeline and cost competitiveness.
“I am encouraged that several of the external factors that have impacted our business in recent quarters are beginning to moderate, positioning us to deliver stronger results going forward.”
Further information about Goodyear’s H1 2019 financial results can be read here.