AKRON — The COVID-19 pandemic quickly changed industry demand, and because of this, Goodyear's first quarter sales were down 15% from a year ago and the company fell into the red on an operating and net basis.
"Our first quarter results were affected significantly by the sharp declines in demand in the wake of the COVID-19 pandemic," Richard J. Kramer, chairman, chief executive officer and president of Goodyear, said.
For the three months ended March 31, Goodyear reported a segment operating loss of $47 million, down from an operating profit of $190 million in 2019, and showed a net loss of $619 million ($2.65 per share), versus a net loss of $61 million (26 cents per share) from a year ago
The company said sales were $3.1 billion, down 15% from 2019. The decline, it said, "was driven by lower industry volume and unfavorable foreign currency translation."
The increase in net loss was driven by discrete tax charges, a decline in segment operating income, and a non-cash goodwill impairment charge, partially offset by lower rationalization charges, the company said.
Tire volume totaled 31.3 million units, down 18% from the prior year's period.
Replacement tire shipments declined 16%, driven by "a severe contraction in industry demand following shelter-in-place mandates and sharp declines in consumer confidence," the company said.
"While this unprecedented crisis continues to disrupt our business and the broader automotive industry, I am confident we will emerge from this crisis in a strong position," Mr. Kramer said.
"We have taken swift actions to aggressively reduce expenses and investment levels, while at the same time continuing to focus on our strategic priorities."
In the Americas, Goodyear was break-even versus operating income of $89 million a year ago, while sales fell nearly 11% to $1.67 billion.
Elsewhere, sales in Asia/Pacific fell 23% to $388 million and 19% in Europe/Middle East to $995 million. Asia/Pacific's operating income fell 87% to $6 million, while Europe/Middle East posted a $53 million operating loss.