The Goodyear Tire & Rubber Co. has reported results for the third quarter and first nine months of 2017.
“During the third quarter, we saw a continuation of the challenging industry conditions we experienced in the second quarter including lower consumer replacement volumes, production cuts by automakers and an increase of more than 30 percent in our raw material input costs,” said Richard Kramer, chairman, CEO and president.
“Despite these headwinds, which we expect to moderate over the coming quarters, we continue to execute against our long-term strategy. We remain focused on the opportunities for driving profitable growth including our connected business model, which aligns all of our assets from our manufacturing plants to consumers who choose Goodyear online and at retail.”
Goodyear’s third quarter 2017 sales were $3.9 billion, up from $3.8 billion a year ago, with the increase largely attributable to improved price/mix, which drove revenue per tire up 5 percent over the 2016 quarter, excluding the impact of foreign currency translation.
Tire unit volumes totaled 39.8 million, down 5 percent from 2016. Replacement tire shipments were down 4 percent. OE unit volume was down 9 percent.
Goodyear’s third quarter 2017 net income was $129 million (50 cents per share), down from $317 million ($1.19 per share) in the year-ago quarter. Third quarter 2017 adjusted net income was $177 million (70 cents per share), down from $310 million ($1.17 per share) in 2016. Per share amounts are diluted.
Year-to-Date Results
Goodyear’s sales for the first nine months of 2017 were $11.3 billion, down 1 percent from the 2016 period, reflecting lower tire unit volume, partially offset by improved price/mix, which drove revenue per tire up 4 percent over the 2016 period, excluding the impact of foreign currency translation.
Tire unit volumes totaled 117.2 million, down 6 percent from 2016. Replacement tire shipments were down 5 percent due to increased competition. OE unit volume was down 8 percent, driven by reduced auto production.
Goodyear’s year-to-date net income of $442 million ($1.73 per share) is down from $703 million ($2.62 per share) in 2016’s first nine months. Year-to-date adjusted net income was $543 million ($2.13 per share), down from $818 million ($3.05 per share) in 2016. Per share amounts are diluted.
The company reported first nine months segment operating income of $1.1 billion in 2017, down from $1.5 billion a year ago. The decrease was driven by higher raw material costs and the impact of lower volume, partially offset by improved price/mix and net cost savings.
2017 Outlook
The company now expects its full-year 2017 segment operating income to be approximately $1.5 billion.
Shareholder Return Program
The company paid a quarterly dividend of 10 cents per share of common stock on Sept. 1, 2017. The board of directors has declared a quarterly dividend of 14 cents per share payable Dec. 1, 2017, to shareholders of record on Nov. 1, 2017, which represents a 40 percent increase per share.
As a part of its previously announced $2.1 billion share repurchase program, the company repurchased 5.6 million shares of its common stock for $175 million during the third quarter. Since its inception, purchases under the program total 37.6 million shares for $1.1 billion.
