Goodyear Tire & Rubber Co. reported a net loss of $57 million in the first quarter, an improvement from the same period in 2023 when the tiremaker recorded a loss of $101 million.
Goodyear sold 40.4 million tires during the first quarter — 3.3% fewer than the same period last year. Sales for the quarter totaled $4.537 billion, down 8.2% from $4.941 billion a year ago.
Segment operating income nearly doubled — totaling $247 million, up from $125 million in 2023.
In a press release, the company referred to the results as “a strong start to the year.” CEO and President Mark Stewart is expected to provide more commentary during a call with investors at 8 a.m. on May 7.
Goodyear anticipates a benefit of $375 million in 2024 from actions that are part of the Goodyear Forward plan. Already, the tiremaker said it has achieved $72 million of that goal in segment operating income benefit.
Regional results
In the Americas, year-over-year results were down. Goodyear sold 19.0 million tires, down from 20.5 million units in the first quarter of 2023. Net sales totaled $2.588 billion, down 9.7% from $2.867 billion a year ago.
While the overall tire units were down 7.4%, Goodyear noted that replacement unit volume decreased 9.2% “given industry member declines in the U.S. Industry non-members, generally representing low cost imported product, grew significantly in the quarter.”
Original equipment tire volumes were flat in the Americas.
Gains in segment operating income in the Americas were driven by several factors, including lower transportation costs, benefits from the Goodyear Forward plan, and favorable price/mix compared to raw material costs. The tiremaker noted the benefits were “partly offset by inflationary costs and lower volume.”
In EMEA, first quarter sales fell 9.7% compared to the year-ago period, $1.347 billion compared to $1.492 billion. Goodyear said the results were “driven by lower replacement volumes and unfavorable price/mix due to a weak commercial truck industry and contractual price adjustments.” Tire volumes were down 5.2%. Replacement tire units fell by 7.1%, due to “increased competition at the low end of the market, driven by non-member imports and industry declines in commercial truck.”
Original equipment tire units were flat in EMEA.
The region’s segment operating income of $8 million was flat. Benefits included favorable price/mix and raw material costs, as well as the Goodyear Forward plan. But those positives were offset by inflation, lower volumes and the affect of the fire at Goodyear’s Debica, Poland facility in 2023.
The results in Asia Pacific offered a bright spot. Tire units were up 10%, with 8.9 million units sold in the first quarter of 2024 compared to 8.1 million units a year ago. The gains were driven by original equipment volumes, which increased 28.7% — a result of EV fitments in China.
Replacement tire volumes fell 1.6% in Asia Pacific.
Net sales in the region increased 3.4% to $602 million, up from $582 million.
Outlook
For the second quarter of 2024, Goodyear is expecting global tire unit volumes to be flat, with the exception of recovery gains to be made in the Tupelo, Miss., factory. Those volumes will lead to an estimated $30 million headwind in the quarter due to “unabsorbed overhead driven by lower production (in the first quarter.)”
The recovery in Tupelo should result in a $35 million net benefit — and 1 million units. But it will be partly offset by the impact of a fire at the company’s facility in Poland. (The Poland facility is expected to recover during the second half of the year.)
Goodyear expects a $160 million benefit in raw materials during the next quarter — and a benefit in the range of $325-350 million for the year, based on “recent commodity rates.”
For 2024, Goodyear expects global consumer replacement unit volumes to be below industry levels (driven by the results of the first quarter.) Global consumer OE unit volumes are expected to outpace the industry, particularly in the first half of the year.
Goodyear is working off industry assumptions that both consumer and commercial tire units will fall in the range of down 2% to up 2%. On the consumer side, Goodyear expects “slight growth” in the Americas OE business, which will offset weaker conditions in EMEA. The tiremaker forecasts growth in the Asian replacement business, but weaker demand in “mature markets.”
In the commercial business, the replacement market will see slight growth thanks to stabilization in EMEA. The OE side will be weaker for commercial in both the Americas and EMEA, Goodyear said.
