Goodyear Tire and Rubber company reported results for the second quarter and first half of 2016

For Goodyear, the second quarter 2016 sales were 3.9 billion US dollars, down from 4.2 billion US dollars a year ago, with the decrease largely attributable to the deconsolidation of the company’s subsidiary in Venezuela, the sale of the North American motorcycle tire business and unfavorable currency translation.

2016-08-03 16:27:07

"We delivered higher volumes and solid earnings in the quarter, achieving operating margins above 11 percent in all three business units," said Richard J. Kramer, chairman and chief executive officer. "Industry fundamentals remain favorable across many of our key markets and demand for our premium, high-value-added tires is strong. Our focus remains on the disciplined execution of our strategy and delivering on our financial targets."

Tire unit volumes totaled 41.5 million, up 2 percent from 2015, driven by growth in the Asia Pacific and Europe, Middle East and Africa regions. Replacement tire shipments were up 4 percent. Original equipment unit volume was down 4 percent.

Goodyear′s second quarter 2016 net income was 202 million US dollars (75 cents per share), up from 192 million US dollars (70 cents per share) in the year-ago quarter. The improvement was primarily due to a decrease in income tax expense. Excluding certain significant items, second quarter 2016 adjusted net income was 314 million US dollars (1.16 US dollars per share), up from 229 million US dollars (84 cents per share) in 2015. Per share amounts are diluted.

The company reported second quarter segment operating income of 531 million US dollars in 2016, down from 550 million US dollars a year ago. Segment operating income in 2016 was negatively impacted by a 24 million US dollars out-of-period adjustment primarily attributable to 2012 and related to the elimination of intracompany profit in the Americas region. This amount is included as a significant item in adjusted net income. The decrease in segment operating income also reflects a 36 million US dollars reduction resulting from the deconsolidation of Venezuela partially offset by cost reduction actions. Core segment operating income, which excludes Venezuela, was 514 million US dollars in the year-ago quarter.

Goodyear's sales for the first six months of 2016 were 7.6 billion US dollars, down 8 percent from the 2015 period, reflecting unfavorable foreign currency translation of 225 million US dollars and the deconsolidation of Venezuela.

Tire unit volumes totaled 83.0 million, up 2 percent from 2015, driven by growth in the Asia Pacific region, primarily in Japan and China. Replacement tire shipments were up 3 percent. Original equipment unit volume was down 1 percent. Excluding the impact of the deconsolidation of Venezuela, unit volumes increased 3 percent.

Goodyear's year-to-date net income of 386 million US dollars (1.43 US dollars per share) is down from 416 million US dollars (1.52 US dollars per share) in 2015's first half. The decrease was due to a one-time gain of 155 million US dollars (99 million after-tax) on the recognition of deferred royalty income in 2015. All per share amounts are diluted.

The company reported first half segment operating income of 950 million US dollars in 2016, up from 938 million US dollars a year ago. The increase was driven by favorable price/mix net of raw materials and the impact of higher volume. These improvements were partially offset by the deconsolidation of Venezuela. Core segment operating income, which excludes Venezuela, was 880 million in the 2015 first half.

Europe, Middle East and Africa's second quarter sales of 1.3 billion US dollars were about equal to the prior year, as a 4 percent increase in sales volume was offset by unfavorable price/mix and foreign currency translation. Replacement tire shipments were up 3 percent. Original equipment unit volume was up 8 percent, the company announced.

Second quarter 2016 segment operating income of 148 million was 37 percent above the prior year driven by the impact of higher volume and lower selling, administrative and general expenses, according to financial statement of the company.