Goodyear reported segment operating income of $525 million for the first half of fiscal 2021 on 43.3% higher sales revenue of $7.49 billion. Net income was $79 million for the first six months, compared with a net loss of $1.3 billion.
Goodyear cited "above-market" growth in many sectors, the addition of three weeks of sales from Cooper Tire, increased sales from other tire-related businesses and favorable foreign currency translation for the improvements.
Second-quarter sales increased 85.3% to $3.98 billion, and the firm returned to the black on a net basis with income of $67 million, which contrasts with a net loss of $696 million a year ago.
These factors were partially offset by higher selling, administrative and general expenses (SAG), reflecting the impact of payroll and advertising expenses returning to more normal levels after last year's COVID-19 response actions, and higher raw material costs.
"Broad economic recovery remains robust, particularly in the U.S. and China," Goodyear Chairman, CEO and President Rich Kramer said. "Our second-quarter results demonstrate our ability to capture value in the marketplace with innovative products and services while overcoming inflationary cost pressure."
The addition of Cooper Tire also contributed to the merger-adjusted earnings growth, Mr. Kramer said, noting that the combined staffs "are now focused on integrating our businesses and leveraging the combination to provide enhanced service for our customers and consumers."
The reported results also include a Cooper Tire operating loss of $16 million, which includes $40 million of amortization of Cooper Tire inventory step-up, $6 million of other transaction-related items, and $4 million incremental amortization of Cooper Tire intangible assets.
Tire unit volumes in the half year totaled 72.5 million units, up 40.2% from the 2020 period. The impact of the COVID-19 pandemic on industry demand moderated significantly relative to the prior year.
Replacement tire volume increased 78%, reflecting both continuing industry recovery and market-share gains, Goodyear said. Original equipment unit volume more than doubled, driven by higher vehicle production and increased market share.
Tire unit volumes totaled 72.5 million, up 40% from 2020. Replacement tire shipments increased 41%, reflecting stronger industry demand and market share gains. Original equipment volume increased 39%, driven by higher global vehicle production and increased market share.
Goodyear's North American business unit reported operating income for the half of $347 million, versus an operating loss of $287 million a year ago. Sales revenue jumped 44% to $4.04 billion, driven by 125% higher volume, the Cooper Tire merger and increased sales from other tire-related businesses.
Replacement tire volume increased 120% in the quarter, Goodyear said, reflecting stronger industry demand, U.S. consumer replacement market share gains and the addition of Cooper Tire. OE unit volume increased 155%, reflecting higher industry demand and market share gains in Latin America.
Goodyear's other operating units — Europe/Middle East/Africa and Asia/Pacific — returned to the black as well in the half on 47.4% and 36.6% higher sales, respectively.