Goodyear reports positive first quarter results

Akron, OH – The Goodyear Tire & Rubber Company results for the first quarter of 2021.
“We delivered impressive segment operating income, which was significantly above first quarter 2020 results and also nearly 20 percent higher than first quarter 2019 despite sales volumes not yet having fully recovered to pre-COVID levels,” said Richard J. Kramer, chairman, chief executive officer and president. “We achieved these results despite the impact of a severe winter storm in the U.S. and industry supply chain challenges during the quarter.
“Our consumer replacement business delivered outstanding results. By leveraging improved distribution and new products, we outperformed the industry while expanding margins. At the same time, we also continued to build our OE business, where we are benefiting from our leading technical capabilities and emerging mobility trends,” continued Kramer.
“I’d like to acknowledge and thank all of our associates for continuing to manage through personal and professional challenges to deliver for our customers and communities,” added Kramer.
Goodyear’s first quarter 2021 sales were $3.5 billion, up 15% from a year ago. The increase was driven by higher volume, improvements in price/mix and favorable foreign currency translation.
Tire unit volumes totaled 35.0 million, up 12% from the prior year’s period. The impact of the COVID-19 pandemic on industry demand moderated relative to the prior year. Replacement tire volume increased 14%, reflecting both continuing industry recovery and market share gains. Original equipment unit volume increased 5%, driven by higher vehicle production in Asia Pacific and increased market share in EMEA.
Goodyear’s first quarter 2021 net income was $12 million (5 cents per share) compared to a net loss of $619 million ($2.65 per share) a year ago. The 2021 period included several significant items, including, on a pre-tax basis, rationalization charges of $50 million primarily associated with a plan to reduce selling, administrative and general expense in EMEA and the modernization of two manufacturing facilities in Germany, and a negative impact of $23 million related to a severe winter storm in the U.S. Goodyear’s first quarter 2020 net loss included a charge of $295 million related to a valuation allowance on certain deferred tax assets for foreign tax credits and, on a pre-tax basis, a non-cash impairment charge of $182 million to reduce the carrying value of goodwill in its EMEA business unit.
First quarter 2021 adjusted net income was $102 million (43 cents per share) compared to an adjusted net loss of $140 million (60 cents per share) in 2020. Per share amounts are diluted.
The company reported segment operating income of $226 million in the first quarter of 2021, up $273 million from a year ago. The increase primarily reflects the impacts of higher volume, including increased factory utilization, improvements in price/mix, the benefits of cost saving actions, including ongoing rationalization plans, and lower raw material costs.
Goodyear will hold an investor conference call at 9 a.m. EDT today. Prior to the commencement of the call, the company will post the financial and other related information that will be presented on its investor relations website: http://investor.goodyear.com.
Participating in the conference call will be Richard J. Kramer, chairman, chief executive officer and president; Darren R. Wells, executive vice president and chief financial officer; and Christina L. Zamarro, vice president, finance and treasurer.
Investors, members of the media and other interested persons can access the conference call on the website or via telephone by calling either (800) 895-3361 or (785) 424-1062 before 8:55 a.m. EDT and providing the Conference ID “Goodyear.” A taped replay will be available by calling (800) 839-6964 or (402) 220-6060. The replay will also remain available on the website.