Goodyear reports positive third quarter numbers
Akron, OH – The Goodyear Tire & Rubber Company reported results for the third quarter and first nine months of 2021.
“We continued to capitalize on favorable industry trends in our key replacement markets,” said Richard J. Kramer, chairman, chief executive officer and president. “Overall consumer replacement demand remains robust, and our business continues to have momentum. We delivered our strongest price/mix in nearly a decade, more than offsetting inflationary pressures and driving strong earnings performance.”
“With the transportation industry moving record freight volume, we also saw robust demand from our largest commercial customers. As a result, our commercial business delivered another strong quarter, with fleet tire volume well above pre-pandemic levels,” added Kramer.
“In addition to positive trends in our business, we also expect to benefit from increased synergies as a result of our combination with Cooper Tire, which include added international initiatives and manufacturing and sales opportunities,” said Kramer.
Goodyear’s third quarter 2021 sales were $4.9 billion, up 42% from a year ago. The increase was driven by the Cooper Tire merger, improvements in price/mix, increased sales from other tire-related businesses and higher volume.
Tire unit volumes totaled 48.2 million, up 32% from the prior year’s period. Replacement tire unit volume increased 44%, reflecting the addition of Cooper Tire unit volume, continuing industry recovery and market share gains. Original equipment unit volume decreased 7%, reflecting lower vehicle production, which continued to be affected by shortages of components and materials.
Goodyear’s third quarter 2021 net income was $132 million (46 cents per share) compared to a net loss of $2 million (1 cent per share) a year ago. The 2021 period included several significant items, including, on a pre-tax basis, amortization related to Cooper Tire inventory step-up adjustments of $72 million. Third quarter 2021 adjusted net income was $206 million (72 cents per share) compared to adjusted net income of $24 million (10 cents per share) in the prior year’s quarter. Per share amounts are diluted.
The company reported segment operating income of $372 million in the third quarter of 2021, up $210 million from a year ago. The company also reported merger-adjusted segment operating income of $449 million, which excludes certain costs triggered by the Cooper Tire merger. The increase in segment operating income primarily reflects improvements in price/mix, the impacts of higher volume, including increased factory utilization, and higher earnings from other tire-related businesses. These factors were partially offset by higher raw material costs, the nonrecurrence of benefits related to temporary cost reductions during last year’s pandemic shutdown, and inflationary cost pressures in wages, benefits, transportation and energy. The reported results also include Cooper Tire operating income of $48 million, which includes $70 million of amortization of Cooper Tire inventory step-up adjustments and $7 million incremental amortization of Cooper Tire intangible assets.