First quarter Goodyear net
loss of $57 million (20 cents per share); adjusted net income of
$29 million (10 cents per share)
Segment operating income of $247
million, up $122 million
compared to the first quarter of 2023
Americas segment operating income of $179 million, more than double prior year of
$79 million; segment operating margin
of ~7.0%
Segment operating margin in Asia
Pacific of 10.0%, up 350 basis points
Goodyear Forward transformation initiatives delivered
$72 million
AKRON,
Ohio, May 6, 2024 /PRNewswire/ -- The Goodyear
Tire & Rubber Company (NASDAQ: GT) reported first quarter 2024
results and a strong start to the year.
The company will host an investor call tomorrow morning at
8:00 a.m. eastern time led by
Mark Stewart, Goodyear's recently appointed chief executive
officer and president and Christina
Zamarro, the company's executive vice president and chief
financial officer. The management team will share insights on first
quarter performance and progress on the Goodyear Forward
transformation plan, and Mark will share reflections after his
first 90 days with the company.
Additional earnings materials have been posted to Goodyear's investor relations website at
http://investor.goodyear.com.
Goodyear's first quarter 2024
sales were $4.5 billion with tire
unit volumes totaling 40.4 million. First quarter 2024
Goodyear net loss was $57 million
(20 cents per share) compared to a
Goodyear net loss of $101 million (35
cents per share) a year ago. The year over year improvement
was driven by increases in segment operating income. The 2024
period also included several significant items including, on a
pre-tax basis, Goodyear Forward costs of $28
million and rationalization charges of $22 million, compared with pre-tax
rationalization charges of $32
million in 2023. Goodyear Forward costs are comprised
of advisory, legal and consulting fees and costs associated with
planned asset sales.
First quarter 2024 adjusted net income was $29 million compared to adjusted net loss of
$82 million in the prior year's
quarter. Adjusted earnings per share was $0.10, compared to a loss of $0.29 in the prior year's quarter.
The company reported segment operating income of $247 million in the first quarter of 2024, up
$122 million from a year ago. The
increase in segment operating income reflects benefits of
$127 million from price/mix versus
raw materials and $72 million from
the Goodyear Forward transformation plan. These were partly offset
by the impact of net inflationary costs of $33 million and lower tire volume of $28 million.
Reconciliation of Non-GAAP Financial Measures
See "Non-GAAP Financial Measures" and "Financial Tables" for
further explanation and reconciliation tables for historical Total
Segment Operating Income and Margin; Adjusted Net Income (Loss);
and Adjusted Diluted Earnings per Share, reflecting the impact of
certain significant items on the 2024 and 2023 periods.
Business Segment Results
AMERICAS
|
First Quarter
|
(In millions)
|
2024
|
|
2023
|
Tire Units
|
19.0
|
|
20.5
|
Net Sales
|
$2,588
|
|
$2,867
|
Segment Operating
Income
|
179
|
|
79
|
Segment Operating
Margin
|
6.9 %
|
|
2.8 %
|
|
|
|
|
Americas' first quarter 2024 sales of $2.6 billion were down 9.7% driven by lower
replacement volumes and unfavorable price/mix due to continuing
industry weakness in commercial truck and contractual price
adjustments. Tire unit volume decreased 7.4%. Replacement tire 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 unit
volumes were flat.
First quarter 2024 segment operating income of $179 million increased $100 million from the prior year's quarter. The
increase was driven by lower transportation costs, benefits from
the execution of Goodyear Forward initiatives and favorable net
price/mix versus raw material costs. These benefits were partly
offset by inflationary costs and lower volume.
EMEA
|
First Quarter
|
(In millions)
|
2024
|
|
2023
|
Tire Units
|
12.5
|
|
13.2
|
Net Sales
|
$1,347
|
|
$1,492
|
Segment Operating
Income
|
8
|
|
8
|
Segment Operating
Margin
|
0.6 %
|
|
0.5 %
|
EMEA's first quarter 2024 sales of $1.3
billion were down 9.7% driven by lower replacement volumes
and unfavorable price/mix due to a weak commercial truck industry
and contractual price adjustments. Tire unit volume decreased 5.2%.
Replacement tire unit volume decreased 7.1% given increased
competition at the low end of the market driven by non-member
imports and industry declines in commercial truck. Original
equipment unit volumes were flat.
First quarter 2024 segment operating income of $8 million was flat compared to the prior year's
quarter. Segment operating income benefitted from favorable net
price/mix versus raw material costs and the Goodyear Forward plan.
These benefits were offset by inflationary costs, lower volume and
the impact of the fire at our Debica, Poland facility in 2023.
ASIA PACIFIC
|
First Quarter
|
(In millions)
|
2024
|
|
2023
|
Tire Units
|
8.9
|
|
8.1
|
Net Sales
|
$602
|
|
$582
|
Segment Operating
Income
|
60
|
|
38
|
Segment Operating
Margin
|
10.0 %
|
|
6.5 %
|
Asia Pacific's first quarter
2024 sales increased 3.4% to $602
million, driven by higher original equipment volume. Tire
unit volume increased 10.0%. Original equipment unit volume
increased 26.7%, driven by EV fitments in China. Replacement tire unit volume decreased
1.6%, reflecting industry declines.
First quarter 2024 segment operating income of $60 million was up $22
million from prior year driven by favorable net price/mix
versus raw material costs, higher volume and benefits from the
Goodyear Forward plan. These factors were partly offset by higher
inflation.
Conference Call
The Company will host an investor call on Tuesday, May 7 at 8:00
a.m. EDT. Please visit Goodyear's investor relations website:
http://investor.goodyear.com, for additional earnings
materials.
Participating in the conference call will be Mark W. Stewart, chief executive officer and
president; and Christina L. Zamarro,
executive vice president and chief financial officer.
The investor call can be accessed on the website or via
telephone by calling either (800) 343-4136 or (203) 518-9843 before
7:55 a.m. and providing the
conference ID "Goodyear." A replay
will be available by calling (888) 566-0829 or (402) 220-0120. The
replay will also be available on the website.
About Goodyear
Goodyear is one of the world's
largest tire companies. It employs about 71,000 people and
manufactures its products in 55 facilities in 22 countries around
the world. Its two Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg, strive to develop state-of-the-art
products and services that set the technology and performance
standard for the industry. For more information about Goodyear and its products, go to
www.goodyear.com/corporate.
Forward-Looking Statements
Certain information contained in this news release constitutes
forward-looking statements for purposes of the safe harbor
provisions of The Private Securities Litigation Reform Act of 1995.
There are a variety of factors, many of which are beyond our
control, that affect our operations, performance, business strategy
and results and could cause our actual results and experience to
differ materially from the assumptions, expectations and objectives
expressed in any forward-looking statements. These factors include,
but are not limited to: our ability to implement successfully the
Goodyear Forward plan and our other strategic initiatives; actions
and initiatives taken by both current and potential competitors;
increases in the prices paid for raw materials and energy;
inflationary cost pressures; delays or disruptions in our supply
chain or the provision of services to us; a prolonged economic
downturn or period of economic uncertainty; deteriorating economic
conditions or an inability to access capital markets; a labor
strike, work stoppage, labor shortage or other similar event;
financial difficulties, work stoppages, labor shortages or supply
disruptions at our suppliers or customers; the adequacy of our
capital expenditures; changes in tariffs, trade agreements or trade
restrictions; foreign currency translation and transaction risks;
our failure to comply with a material covenant in our debt
obligations; potential adverse consequences of litigation involving
the company; as well as the effects of more general factors such as
changes in general market, economic or political conditions or in
legislation, regulation or public policy. Additional factors are
discussed in our filings with the Securities and Exchange
Commission, including our annual report on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K. In addition,
any forward-looking statements represent our estimates only as of
today and should not be relied upon as representing our estimates
as of any subsequent date. While we may elect to update
forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so, even if our
estimates change.
Non-GAAP Financial Measures (unaudited)
This news release presents non-GAAP financial measures,
including Total Segment Operating Income and Margin, Adjusted Net
Income (Loss), and Adjusted Diluted Earnings Per Share (EPS), which
are important financial measures for the company but are not
financial measures defined by U.S. GAAP, and should not be
construed as alternatives to corresponding financial measures
presented in accordance with U.S. GAAP.
Total Segment Operating Income is the sum of the individual
strategic business units' (SBUs') Segment Operating Income as
determined in accordance with U.S. GAAP. Total Segment Operating
Margin is Total Segment Operating Income divided by Net Sales as
determined in accordance with U.S. GAAP. Management believes that
Total Segment Operating Income and Margin are useful because they
represent the aggregate value of income created by the company's
SBUs and exclude items not directly related to the SBUs for
performance evaluation purposes. The most directly comparable U.S.
GAAP financial measures to Total Segment Operating Income and
Margin are Goodyear Net Income (Loss) and Return on Net Sales
(which is calculated by dividing Goodyear Net Income (Loss) by Net
Sales).
Adjusted Net Income (Loss) is Goodyear Net Income (Loss) as
determined in accordance with U.S. GAAP adjusted for certain
significant items. Adjusted Diluted Earnings Per Share (EPS) is the
company's Adjusted Net Income (Loss) divided by Weighted Average
Shares Outstanding-Diluted as determined in accordance with U.S.
GAAP. Management believes that Adjusted Net Income (Loss) and
Adjusted Diluted Earnings Per Share (EPS) are useful because they
represent how management reviews the operating results of the
company excluding the impacts of rationalizations, asset
write-offs, accelerated depreciation, asset sales and certain other
significant items.
It should be noted that other companies may calculate
similarly-titled non-GAAP financial measures differently and, as a
result, the measures presented herein may not be comparable to such
similarly-titled measures reported by other companies. See the
following tables for reconciliations of historical Total Segment
Operating Income and Margin, Adjusted Net Income (Loss) and
Adjusted Diluted Earnings Per Share to the most directly comparable
U.S. GAAP financial measures.
The Goodyear Tire & Rubber Company and
Subsidiaries
Financial Tables (Unaudited)
Table 1:
Consolidated Statement of Operations
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
(In millions, except per share
amounts)
|
2024
|
|
2023
|
|
|
Net Sales
|
$ 4,537
|
|
$ 4,941
|
|
|
Cost of Goods
Sold
|
3,715
|
|
4,193
|
|
|
Selling, Administrative
and General Expense
|
696
|
|
664
|
|
|
Rationalizations
|
22
|
|
32
|
|
|
Interest
Expense
|
126
|
|
127
|
|
|
Other (Income)
Expense
|
30
|
|
25
|
|
|
Loss before Income
Taxes
|
(52)
|
|
(100)
|
|
|
United States and
Foreign Tax Expense (Benefit)
|
6
|
|
(1)
|
|
|
Net Loss
|
(58)
|
|
(99)
|
|
|
Less: Minority
Shareholders' Net Income (Loss)
|
(1)
|
|
2
|
|
|
Goodyear Net Loss
|
$
(57)
|
|
$
(101)
|
|
|
Goodyear Net Loss — Per
Share of Common Stock
|
|
|
|
|
|
Basic
|
$ (0.20)
|
|
$ (0.35)
|
|
|
Weighted Average
Shares Outstanding
|
286
|
|
285
|
|
|
Diluted
|
$ (0.20)
|
|
$ (0.35)
|
|
|
Weighted Average
Shares Outstanding
|
286
|
|
285
|
|
Table 2:
Consolidated Balance Sheets
|
|
|
March
31,
|
|
December
31,
|
(In millions, except
share data)
|
2024
|
|
2023
|
Assets:
|
|
|
|
Current
Assets:
|
|
|
|
Cash and Cash
Equivalents
|
$
893
|
|
$
902
|
Accounts Receivable,
less Allowance — $96 ($102 in 2023)
|
3,033
|
|
2,731
|
Inventories:
|
|
|
|
Raw
Materials
|
783
|
|
785
|
Work in
Process
|
209
|
|
206
|
Finished
Products
|
2,839
|
|
2,707
|
|
3,831
|
|
3,698
|
Prepaid Expenses and
Other Current Assets
|
305
|
|
319
|
Total Current
Assets
|
8,062
|
|
7,650
|
Goodwill
|
780
|
|
781
|
Intangible
Assets
|
962
|
|
969
|
Deferred Income
Taxes
|
1,661
|
|
1,630
|
Other
Assets
|
1,094
|
|
1,075
|
Operating Lease
Right-of-Use Assets
|
993
|
|
985
|
Property, Plant and
Equipment, less Accumulated Depreciation — $12,587 ($12,472 in
2023)
|
8,439
|
|
8,492
|
Total
Assets
|
$
21,991
|
|
$
21,582
|
|
|
|
|
Liabilities:
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts Payable —
Trade
|
$
4,223
|
|
$
4,326
|
Compensation and
Benefits
|
629
|
|
663
|
Other Current
Liabilities
|
1,185
|
|
1,165
|
Notes Payable and
Overdrafts
|
388
|
|
344
|
Operating Lease
Liabilities due Within One Year
|
200
|
|
200
|
Long Term Debt and
Finance Leases due Within One Year
|
395
|
|
449
|
Total Current
Liabilities
|
7,020
|
|
7,147
|
Operating Lease
Liabilities
|
841
|
|
825
|
Long Term Debt and
Finance Leases
|
7,483
|
|
6,831
|
Compensation and
Benefits
|
913
|
|
974
|
Deferred Income
Taxes
|
80
|
|
83
|
Other Long Term
Liabilities
|
856
|
|
885
|
Total
Liabilities
|
17,193
|
|
16,745
|
Commitments and
Contingent Liabilities
|
|
|
|
Shareholders'
Equity:
|
|
|
|
Goodyear
Shareholders' Equity:
|
|
|
|
Common Stock, no par
value:
|
|
|
|
Authorized, 450 million
shares, Outstanding shares — 285 million in 2024 (284 million in
2023)
|
285
|
|
284
|
Capital
Surplus
|
3,140
|
|
3,133
|
Retained
Earnings
|
5,029
|
|
5,086
|
Accumulated Other
Comprehensive Loss
|
(3,819)
|
|
(3,835)
|
Goodyear
Shareholders' Equity
|
4,635
|
|
4,668
|
Minority Shareholders'
Equity — Nonredeemable
|
163
|
|
169
|
Total Shareholders'
Equity
|
4,798
|
|
4,837
|
Total Liabilities
and Shareholders' Equity
|
$
21,991
|
|
$
21,582
|
Table 3:
Consolidated Statements of Cash Flows
|
|
|
Three Months
Ended
|
|
March
31,
|
(In
millions)
|
2024
|
|
2023
|
Cash Flows from
Operating Activities:
|
|
|
|
Net Income
(Loss)
|
$
(58)
|
|
$
(99)
|
Adjustments to
Reconcile Net Income (Loss) to Cash Flows from Operating
Activities:
|
|
|
|
Depreciation and
Amortization
|
284
|
|
251
|
Amortization and
Write-Off of Debt Issuance Costs
|
3
|
|
2
|
Provision for Deferred
Income Taxes
|
(42)
|
|
(60)
|
Net Pension
Curtailments and Settlements
|
(5)
|
|
—
|
Net Rationalization
Charges
|
22
|
|
32
|
Rationalization
Payments
|
(55)
|
|
(21)
|
Net (Gains) Losses on
Asset Sales
|
2
|
|
(2)
|
Operating Lease
Expense
|
85
|
|
74
|
Operating Lease
Payments
|
(69)
|
|
(70)
|
Pension Contributions
and Direct Payments
|
(16)
|
|
(20)
|
Changes in Operating
Assets and Liabilities, Net of Asset Acquisitions and
Dispositions:
|
|
|
|
Accounts
Receivable
|
(325)
|
|
(603)
|
Inventories
|
(167)
|
|
46
|
Accounts Payable —
Trade
|
(47)
|
|
(302)
|
Compensation and
Benefits
|
(38)
|
|
(42)
|
Other Current
Liabilities
|
(45)
|
|
61
|
Other Assets and
Liabilities
|
20
|
|
(22)
|
Total Cash Flows
from Operating Activities
|
(451)
|
|
(775)
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
Expenditures
|
(318)
|
|
(291)
|
Asset
Dispositions
|
108
|
|
2
|
Short Term Securities
Acquired
|
—
|
|
(82)
|
Short Term Securities
Redeemed
|
—
|
|
1
|
Notes
Receivable
|
(21)
|
|
(76)
|
Other
Transactions
|
—
|
|
(10)
|
Total Cash Flows
from Investing Activities
|
(231)
|
|
(456)
|
Cash Flows from
Financing Activities:
|
|
|
|
Short Term Debt and
Overdrafts Incurred
|
282
|
|
294
|
Short Term Debt and
Overdrafts Paid
|
(230)
|
|
(175)
|
Long Term Debt
Incurred
|
3,964
|
|
2,840
|
Long Term Debt
Paid
|
(3,332)
|
|
(1,883)
|
Common Stock
Issued
|
(3)
|
|
(1)
|
Transactions with
Minority Interests in Subsidiaries
|
(2)
|
|
—
|
Debt Related Costs and
Other Transactions
|
(18)
|
|
—
|
Total Cash Flows
from Financing Activities
|
661
|
|
1,075
|
Effect of Exchange Rate
Changes on Cash, Cash Equivalents and Restricted Cash
|
(10)
|
|
8
|
Net Change in Cash,
Cash Equivalents and Restricted Cash
|
(31)
|
|
(148)
|
Cash, Cash Equivalents
and Restricted Cash at Beginning of the Period
|
985
|
|
1,311
|
Cash, Cash
Equivalents and Restricted Cash at End of the Period
|
$
954
|
|
$
1,163
|
Table 4:
Reconciliation of Segment Operating Income &
Margin
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
(In
millions)
|
2024
|
|
2023
|
|
Total Segment
Operating Income
|
$
247
|
|
$
125
|
|
Less:
|
|
|
|
|
Rationalizations
|
22
|
|
32
|
|
Interest
Expense
|
126
|
|
127
|
|
Other (Income)
Expense
|
30
|
|
25
|
|
Asset Write-Offs,
Accelerated Depreciation, and Accelerated Lease Costs,
Net
|
51
|
|
2
|
|
Corporate Incentive
Compensation Plans
|
20
|
|
20
|
|
Retained Expenses of
Divested Operations
|
5
|
|
4
|
|
Other
|
45
|
|
15
|
|
Loss before Income
Taxes
|
$
(52)
|
|
$
(100)
|
|
United States and
Foreign Tax Expense (Benefit)
|
6
|
|
(1)
|
|
Less: Minority
Shareholders' Net Income (Loss)
|
(1)
|
|
2
|
|
Goodyear Net
Loss
|
$
(57)
|
|
$
(101)
|
|
|
|
|
|
|
Net Sales
|
$
4,537
|
|
$
4,941
|
|
Return on Net
Sales
|
-1.3 %
|
|
-2.0 %
|
|
Total Segment Operating
Margin
|
5.4 %
|
|
2.5 %
|
|
Table 5: Reconciliation of Adjusted Net Income (Loss)
and Adjusted Diluted Earnings Per Share
|
|
First Quarter 2024
|
|
(In millions,
except
per share amounts)
|
As
Reported
|
|
Rationalizations,
Asset Write-offs,
Accelerated
Depreciation and
Leases
|
|
Goodyear
Forward
Costs
|
|
Debica Fire
Impact
|
|
Asset and
Other Sales
|
|
Indirect Tax
Settlements
and Discrete
Tax Items
|
|
Pension
Settlement
Charges
(Credits)
|
|
As
Adjusted
|
Net Sales
|
$
4,537
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
4,537
|
Cost of Goods
Sold
|
3,715
|
|
(43)
|
|
-
|
|
(14)
|
|
-
|
|
8
|
|
-
|
|
3,666
|
Gross Margin
|
822
|
|
43
|
|
-
|
|
14
|
|
-
|
|
(8)
|
|
-
|
|
871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SAG
|
696
|
|
(8)
|
|
(28)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
660
|
Rationalizations
|
22
|
|
(22)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Interest
Expense
|
126
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
126
|
Other (Income)
Expense
|
30
|
|
-
|
|
-
|
|
-
|
|
(10)
|
|
2
|
|
5
|
|
27
|
Pre-tax Income
(Loss)
|
(52)
|
|
73
|
|
28
|
|
14
|
|
10
|
|
(10)
|
|
(5)
|
|
58
|
Taxes
|
6
|
|
8
|
|
7
|
|
2
|
|
3
|
|
(2)
|
|
(1)
|
|
23
|
Minority
Interest
|
(1)
|
|
6
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
6
|
Goodyear Net Income
(Loss)
|
$
(57)
|
|
$
59
|
|
$
21
|
|
$
11
|
|
$
7
|
|
$
(8)
|
|
$
(4)
|
|
$
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS
|
$
(0.20)
|
|
$
0.20
|
|
$
0.07
|
|
$
0.04
|
|
$
0.02
|
|
$
(0.02)
|
|
$
(0.01)
|
|
$
0.10
|
First Quarter 2023
|
|
(In millions,
except
per share amounts)
|
As
Reported
|
|
Rationalizations,
Asset Write-offs,
and Accelerated
Depreciation
|
|
Foreign Currency
Translation
Adjustment
Write-Off
|
|
Other Legal
Claims
|
|
As
Adjusted
|
Net Sales
|
$
4,941
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
4,941
|
Cost of Goods
Sold
|
4,193
|
|
(12)
|
|
-
|
|
3
|
|
4,184
|
Gross Margin
|
748
|
|
12
|
|
-
|
|
(3)
|
|
757
|
|
|
|
|
|
|
|
|
|
|
SAG
|
664
|
|
10
|
|
-
|
|
-
|
|
674
|
Rationalizations
|
32
|
|
(32)
|
|
-
|
|
-
|
|
-
|
Interest
Expense
|
127
|
|
-
|
|
-
|
|
-
|
|
127
|
Other (Income)
Expense
|
25
|
|
-
|
|
5
|
|
-
|
|
30
|
Pre-tax Income
(Loss)
|
(100)
|
|
34
|
|
(5)
|
|
(3)
|
|
(74)
|
Taxes
|
(1)
|
|
8
|
|
-
|
|
(1)
|
|
6
|
Minority
Interest
|
2
|
|
-
|
|
-
|
|
-
|
|
2
|
Goodyear Net Income
(Loss)
|
$
(101)
|
|
$
26
|
|
$
(5)
|
|
$
(2)
|
|
$
(82)
|
|
|
|
|
|
|
|
|
|
|
EPS
|
$
(0.35)
|
|
$
0.09
|
|
$
(0.02)
|
|
$
(0.01)
|
|
$
(0.29)
|
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SOURCE The Goodyear Tire & Rubber Company