The Goodyear Tire & Rubber Co. has reported results for the fourth quarter and full-year of 2019.
“In the U.S., market conditions remained largely stable and our consumer and commercial replacement businesses delivered strong performances this year, as they benefited from the strength of our brand, new product introductions, and the steps we have taken to align our distribution,” said Chairman, CEO and President, Richard Kramer. “We also delivered solid consumer replacement growth in both China and Brazil during the second half of the year.
“We continue to face a challenging global environment, including recessionary demand trends in many international markets. To address these challenges, we remain focused on further improving our cost structure and working capital management, while continuing to build our capabilities to enable mobility, today and in the future,” said Kramer.
Goodyear’s fourth quarter 2019 sales were $3.7 billion, down 4% from a year ago, driven primarily by lower industry volume and unfavorable foreign currency translation, partially offset by improved price/mix.
Tire unit volumes totaled 39.6 million, down 2% from 2018. Original equipment unit volume decreased 10%, driven by lower global vehicle production. Replacement tire shipments increased slightly.
Goodyear’s fourth quarter 2019 net loss was $392 million ($1.68 per share) compared to net income of $110 million (47 cents per share) a year ago. The decrease was driven by discrete tax adjustments of $380 million during the fourth quarter of 2019, including a non-cash charge of $334 million related to an acceleration of royalty income in the U.S. from the sale of the next 12 years of European royalty payments to our Luxembourg business, and rationalization charges of $77 million. Fourth quarter 2019 adjusted net income was $45 million (19 cents per share), compared to $120 million (51 cents per share) in 2018. Per share amounts are diluted.
The company reported segment operating income of $242 million in the fourth quarter of 2019, down from $307 million a year ago. The decline primarily reflects a decrease in favorable indirect tax settlements in Brazil, lower factory utilization and lower volume.
Full-Year Results
Goodyear’s 2019 net sales were $14.7 billion, a 5% decrease from the prior year due to unfavorable foreign currency translation, lower volume and reduced third-party chemical sales. These factors were partially offset by improved price/mix.
Tire unit volumes totaled 155.3 million, down 2% from 2018. Original equipment volume decreased 8%, primarily due to lower global vehicle production. Replacement tire shipments were essentially unchanged.
Goodyear’s 2019 net loss was $311 million ($1.33 per share) compared to net income of $693 million ($2.89 per share) in the prior year. The 2019 period included several significant items, most notably discrete tax adjustments of $386 million and rationalization charges of $205 million, primarily related to the previously announced plan to modernize two tire manufacturing facilities in Germany and a plan to curtail production of tires for declining, less profitable segments of the tire market at our Gadsden, Alabama, manufacturing facility.
Goodyear’s 2018 net income included a net gain of $272 million resulting from the TireHub transaction, net of transaction costs. Full-year 2019 adjusted net income was $253 million ($1.08 per share) compared to $555 million ($2.32 per share) in the prior year. Per share amounts are diluted.
