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Goodyear Reports Q1 Net Loss of $101Million

Goodyear Reports Q1

Goodyear reported a Q1 net loss of $101 million as compared to $96 million of income in prior year in the quarter ended March 31.

Net sales in Asia Pacific of $582 Million Increased $15 Million

First quarter results were impacted by overall weaker industry volume and ongoing pressure from cost inflation, partly offset by continued strong price/mix. Global replacement industry volume was down 5.2 per cent in the quarter, reflecting a strong comparable period and channel destocking. Goodyear replacement volume, by comparison, declined 11.2 per cent — worse than the industry, reflecting growth in imports, particularly in Europe and Latin America. Global OE industry volume grew 3.3 per cent, reflecting recovery in OE production. Goodyear OE volume increased 8.2 per cent — better than the industry — reflecting share gains from recent EV fitment wins.

Reported first quarter segment operating income was $125 million, down $178 million compared to prior year. The impact of lower volume was ($138) million, including ($73) million from lower sales volume (3.2 million units lower) and ($65) million from lower production during the fourth quarter (down 3.5 million units compared to the fourth quarter of the prior year) to align with industry demand.

Net sales in Americas of $2.9 billion decreased by $48 million, or 1.6 per cent, compared with the first quarter of 2022. The slight decline in sales was driven by 7.5 per cent lower tyre volume, mostly offset by a 6 per cent increase in revenue per tire.

Net sales in Goodyear‘s Europe, Middle East and Africa (EMEA) region increased year-over-year to $66 million, up 4.6 per cent as compared to the same period in 2022.

Net sales in Asia Pacific of $582 million increased $15 million, or 2.6 per cent, compared to the first quarter of 2022. The sales increase reflects a 13 per cent increase in revenue per tyre (excluding the impact of foreign currency), partly offset by the impact of currency devaluation of 7 per cent and 2 per cent lower unit volumes.

Overall volume in Asia Pacific was down 0.2 million units in the quarter, or 2.2 per cent below 2022 levels. Replacement volume was 5.2 per cent lower (0.3 million units), while OE volume increased 2.4 per cent, or 0.1 million units.  This result reflected a consumer replacement industry that was down approximately 3 per cent compared with the first quarter of 2022.  Strong growth in consumer OE primarily reflected the ramp-up of new fitments

According to Goodyear, its second quarter results are expected to be impacted negatively by the effects of softer industry volume and the ongoing effects of inflation. Having said that, we are expecting significant growth in Americas segment operating income margin, as well as margin growth in Asia Pacific, driven by the continued benefits of price/mix and improving raw material and other cost trends.

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