GOODYEAR Reports Second Quarter, First Half 2022 Results

Net sales growth of 31% compared with the second quarter of 2021, over 15% growth excluding the Cooper Tire transaction

Second quarter Goodyear net income of $166 million; adjusted net income of $131 million

Merger-adjusted segment operating income of $372 million, up 7% compared to the second quarter of 2021

Unit volume growth of 21%, including 7% in legacy business

Price/mix exceeded raw materials by more than $140 million

Revenue per tire (excluding currency impact) up 14% versus second quarter of 2021

AKRON, Ohio, Aug. 5, 2022 /PRNewswire/ — The Goodyear Tire & Rubber Company (NASDAQ: GT) today reported results for the second quarter of 2022.

“Our second quarter and first half sales were the highest in a decade, reflecting the recent addition of Cooper Tire, the benefit of strong pricing actions across many of our key markets, and volume growth,” said Richard J. Kramer, chairman, chief executive officer and president.

“With the increase in our top line, we continued to grow earnings despite elevated inflation and COVID-related disruptions in China. I am pleased with the agility and execution our teams demonstrated through the first half of the year.”

Goodyear’s second quarter 2022 sales were $5.2 billion, up 31% from a year ago. The increase was driven by the Cooper Tire merger, improvements in price/mix, higher volume, and increased sales from other tire-related businesses.

Tire unit volumes totaled 45.6 million, up 21% from the prior year’s period. Replacement and original equipment tire unit volume increased 23% and 17%, respectively, reflecting the addition of Cooper Tire unit volume and growth in our legacy business.

Goodyear’s second quarter 2022 net income was $166 million (58 cents per share) compared to net income of $67 million (27 cents per share) a year ago. There were several significant items in the period, including, on a pre-tax basis, a one-time gain of $95 million on a sale and leaseback transaction related to retail properties in Americas and a gain of $14 million related to a tariff-rate change, partially offset by rationalization charges of $26 million and pension settlement charges of $18 million.

Second quarter 2022 adjusted net income was $131 million compared to adjusted net income of $79 million in the prior year’s quarter. Adjusted earnings per share were $0.46, compared to $0.32 in the prior year’s quarter. Per share amounts are diluted.

The company reported segment operating income of $364 million in the second quarter of 2022, up $65 million from a year ago. The company also reported merger-adjusted segment operating income of $372 million, which excludes certain costs triggered by the Cooper Tire merger, up $23 million from a year ago. The increase in segment operating income primarily reflects improvements in price/mix, the Cooper Tire merger (including the non-recurrence of other transaction-related items in the prior year) and the impact of higher volume. These factors were partly offset by higher raw material costs, inflationary cost pressures in wages, benefits, energy and transportation and the non-recurrence of a $69 million benefit in the prior year related to a Brazilian Supreme Court ruling with respect to indirect taxes.

Year-to-Date Results

Goodyear’s sales for the first six months of 2022 were $10.1 billion, a 35% increase from the 2021 period, primarily due to the Cooper Tire merger, improvements in price/mix, higher volume and increased sales from other tire-related businesses.

Tire unit volumes totaled 90.6 million, up 25% from 2021. Replacement tire shipments increased 29%. This growth included additional tire unit volume related to the Cooper Tire merger, which closed on June 7, 2021, the benefit of stronger industry demand and growth in our legacy business. Original equipment volume increased 13%, driven by higher vehicle production and new fitments.

Goodyear’s net income was $262 million (91 cents per share) compared to net income of $79 million (32 cents per share) in the prior year’s period. The first half of 2022 included several significant items, including, on a pre-tax basis, a one-time gain of $95 million on a sale and leaseback transaction related to retail properties in Americas and a gain of $14 million related to a tariff-rate change, partially offset by rationalization charges of $37 million and pension settlement charges of $18 million.

Goodyear’s adjusted net income for the first six months of 2022 was $236 million (83 cents per share), compared to adjusted net income of $184 million (76 cents per share) in the prior year’s period. Per share amounts are diluted.

The company reported segment operating income of $667 million for the first six months of 2022, up $142 million from a year ago. The company also reported merger-adjusted segment operating income of $683 million, which excludes certain costs triggered by the Cooper Tire merger, up $108 million from the prior year. The increase in segment operating income primarily reflects the impacts of improvements in price/mix, the Cooper Tire merger, including the non-recurrence of other transaction-related items in the prior year, and higher volume. These factors were partly offset by higher raw material costs as well as inflationary cost pressures in wages, benefits, energy and transportation.

Americas’ second quarter 2022 sales of $3.1 billion were nearly 40% higher than in 2021, driven by the Cooper Tire merger, improvements in price/mix, and increased sales from other tire-related businesses. Tire unit volume increased 22%. Replacement tire unit volume increased 24%, driven by the addition of Cooper Tire volume to the company’s reported results. Original equipment unit volume increased almost 13%, reflecting an improvement in vehicle production.

Second quarter 2022 segment operating income of $293 million was up $60 million from the prior year’s quarter. The increase was driven by improvements in price/mix and the Cooper Tire merger. These factors were partially offset by higher raw material costs, inflationary cost pressures and the non-recurrence of a $69 million benefit in the prior year related to a Brazilian Supreme Court ruling with respect to indirect taxes.

Europe, Middle East and Africa’s second quarter 2022 sales increased 22% from last year to $1.5 billion, primarily due to improvements in price/mix, higher volume and the Cooper Tire merger. Tire unit volume increased 21%. Replacement tire unit volume rose 25% due to ongoing industry recovery from the pandemic. Original equipment unit volume increased 7%, reflecting improved vehicle production and share gains.

Second quarter 2022 segment operating income of $52 million was up $9 million from the prior year’s quarter, driven by improvements in price/mix and the impact of higher volume. These factors were partially offset by higher raw material costs and inflationary cost pressures.

Asia Pacific’s second quarter 2022 sales increased 15% to $568 million, driven by higher volume, the Cooper Tire merger and improvements in price/mix. Tire unit volume increased 20% due to the addition of Cooper Tire’s units and growth in the consumer business outside of China. Replacement tire unit volume increased 10%. Original equipment unit volume increased 38% due to new fitments.

Second quarter 2022 segment operating income of $19 million was down $4 million from the prior year’s quarter, driven by higher raw material costs and inflationary cost pressures, partly offset by improvements in price/mix, higher volume and the Cooper Tire merger.

Rationalization Programs

During the quarter, the company approved a plan related to the integration of Cooper Tire aimed at reducing duplicative global administrative headcount and closing redundant Cooper Tire warehouse locations in Americas. The plan will result in approximately 490 job reductions. The program is in line with previously announced planned synergies, costs to achieve, and cash rationalization payment estimates.

Cheyenne Cox

Cheyenne Cox is a news report covering multiple Market and economy News. She is creative and highly professional writer. Cheyenne holds a degree in communication and journalism and has also a Diploma in digital marketing. She belongs to south Africa who has also lived in Europe and is currently based in the US.