The Goodyear Tire & Rubber Co. has reported results for the second quarter and first half of 2017.
Goodyear’s second quarter 2017 sales were $3.7 billion, down from $3.9 billion a year ago, with the decrease largely attributable to lower tire unit volume, partially offset by improved price/mix.
“Our second quarter results reflect the impact of volatile raw material costs and an increasingly challenging competitive environment, particularly in the United States and Europe,” said Richard Kramer, chairman and CEO.
“In addition to higher raw material costs, we have seen a weakening in OE and consumer replacement demand across many of our key markets during the first half, despite strong underlying industry fundamentals,” he said.”The combination of these factors has led to a highly unusual first half environment, particularly given the favorable trends in miles driven, gasoline prices and unemployment that are generally supportive of our industry.
“In light of the challenging global marketplace in the first half of 2017, we have lowered our segment operating income expectations for the remainder of the year,” said Kramer. “Despite the near-term challenges, I am no less optimistic about our ability to drive our strategic priorities against the favorable industry megatrends.”
Tire unit volumes totaled 37.4 million, down 10 percent from 2016, primarily in Europe, Middle East and Africa and the Americas. Replacement tire shipments were down 11 percent. OE unit volume was down 8 percent.
Goodyear’s second quarter 2017 net income was $147 million (58 cents per share), down from $202 million (75 cents per share) in the year-ago quarter. Second quarter 2017 adjusted net income was $177 million (70 cents per share), down from $314 million ($1.16 per share) in 2016. Per share amounts are diluted.
The company reported second quarter segment operating income of $361 million in 2017, down from $531 million a year ago. The decrease reflects higher raw material costs and the impact of lower volume, which were partially offset by improved price/mix and cost savings.
Goodyear’s sales for the first six months of 2017 were $7.4 billion, down 2 percent from the 2016 period, reflecting lower tire unit volume, partially offset by improved price/mix.
Tire unit volumes totaled 77.4 million, down 7 percent from 2016. Replacement tire shipments were down 6 percent, reflecting increased competition. Original equipment unit volume was down 8 percent, driven by lower auto production.
Goodyear’s year-to-date net income of $313 million ($1.23 per share) is down from $386 million ($1.43 per share) in 2016’s first half. All per share amounts are diluted.
The company now expects its 2017 segment operating income to total between $1.6 billion and $1.65 billion.