Goodyear Q2 earnings report shows positive signs

AKRON — Goodyear attributed its postive second quarter 2024 financial results to increases in segment operating income as part of the Goodyear Forward plan that aims to add around $1.3 billion in annual run-rate by year-end 2025.

Goodyear's second quarter 2024 sales were $4.6 billion with tire unit volumes totaling 40.1 million. Second quarter 2024 net income was $85 million, compared to a net loss of $208 million a year ago.

"We demonstrated clear progress on our Goodyear Forward plan in the second quarter, achieving significant margin expansion and securing a definitive agreement to sell our Off-the-Road business," Goodyear Chief Executive Officer and President Mark Stewart, said.

"Our associates are dedicated to delivering Goodyear Forward, and their commitment is especially critical as we look to a second half affected by weaker underlying trends in the industry. I continue to be confident in our ability to deliver Goodyear Forward and 10% segment operating income margin by the end of next year."

Goodyear said the year-over-year improvement was driven by increases in segment operating income. The second quarter of 2024 included several significant items including, on a pre-tax basis, a benefit of $96 million from asset and other sales, Goodyear Forward costs of $40 million and rationalization charges of $19 million, the company said.

The second quarter of 2023 included pre-tax rationalization charges of $72 million and a $51 million benefit from asset and other sales. Goodyear Forward costs are comprised of advisory, legal and consulting fees and costs associated with planned asset sales.

Second quarter 2024 adjusted net income was $54 million compared to an adjusted net loss of $97 million in the prior year's quarter.

The company reported segment operating income of $339 million in the second quarter of 2024, up $215 million from a year ago. The increase in segment operating income reflects benefits of $99 million from price/mix versus raw materials, $90 million from the Goodyear Forward transformation plan, $63 million from insurance claim recoveries, net of related expenses, and $50 million from the 2023 negative impact of the Tupelo storm. These were partly offset by the impact of lower tire volume of $41 million and unfavorable fixed overhead absorption of $35 million.

Goodyear's sales for the first six months of 2024 were $9.1 billion with tire unit volumes totaling 80.5 million.

First half 2024 Goodyear net income was $28 million, compared to a Goodyear net loss of $309 million a year ago. The year over year improvement was driven by increases in segment operating income. The first half of 2024 also included several significant items including, on a pre-tax basis, Goodyear Forward costs of $67 million, rationalization charges of $41 million, and a benefit of $86 million from asset and other sales. The first half of 2023 included pre-tax rationalization charges of $104 million and a $52 million benefit from asset and other sales.

First half 2024 adjusted net income was $83 million compared to an adjusted net loss of $179 million in the prior year.

The company reported segment operating income of $586 million for the first six months of 2024, up $337 million from a year ago. The increase in segment operating income reflects benefits of $227 million from price/mix versus raw materials, $162 million from the Goodyear Forward transformation plan, $52 million from insurance claim recoveries, net of related expenses, and $50 million from the 2023 negative impact of the Tupelo storm. These were partially offset by lower tire volume of $69 million, a net headwind of $58 million from higher inflationary costs, and unfavorable fixed overhead absorption of $33 million.

First half 2024 total cash flows from operating activities was a use of $518 million compared with a use of $434 million in the first half of 2023.