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Goodyear Sales and Earnings up in Q2

Autosphere » Tires » Goodyear Sales and Earnings up in Q2
The Goodyear Tire & Rubber Company saw growth in both sales and income during Q2, 2022. Photo Goodyear

Recently, the Goodyear Tire & Rubber Company today reported results for its second quarter of 2022.

Goodyear’s second quarter 2022 sales were $5.2 billion, up 31% from a year ago. The increase was driven by the merger with Cooper Tire, as well as improvements in price/mix, higher volume, and increased sales from other tire-related businesses.

Tire unit volumes totalled 45.6 million, up 21% from the prior year’s period. Replacement and original equipment tire unit volume increased 23% and 17%, respectively, reflecting the addition of Cooper Tire unit volume as well as growth in Goodyear’s legacy business.

Goodyear’s second quarter 2022 net income was $166 million (58 cents per share) compared to a net income of $67 million (27 cents per share) a year ago. There were several significant items in the period, including, on a pre-tax basis, a one-time gain of $95 million on a sale and leaseback transaction related to retail properties in America and a gain of $14 million related to a tariff-rate change, partially offset by rationalization charges of $26 million and pension settlement charges of $18 million.

Significant income growth

In the second quarter of 2022 adjusted net income was $131 million compared to an adjusted net income of $79 million in the prior year’s quarter. Adjusted earnings per share were $0.46, compared to $0.32 in the prior year’s quarter. Per share amounts are diluted. 

The company reported segment operating income of $364 million in the second quarter of 2022, up $65 million from a year ago. The company also reported merger-adjusted segment operating income of $372 million, which excludes certain costs triggered by the Cooper Tire merger, up $23 million from a year ago. The increase in segment operating income primarily reflects improvements in price/mix, the Cooper Tire merger (including the non-recurrence of other transaction-related items in the prior year) and the impact of higher volume. These factors were partly offset by higher raw material costs, inflationary cost pressures in wages, benefits, energy and transportation and the non-recurrence of a $69 million benefit in the prior year related to a Brazilian Supreme Court ruling with respect to indirect taxes.

“Our second quarter and first half sales were the highest in a decade, reflecting the recent addition of Cooper Tire, the benefit of strong pricing actions across many of our key markets, and volume growth,” said Richard J. Kramer, Chairman, Chief Executive Officer & President of Goodyear.

“With the increase in our top line, we continued to grow earnings despite elevated inflation and COVID-related disruptions in China. I am pleased with the agility and execution our teams demonstrated through the first half of the year.”

Year-to-date results

Goodyear’s sales for the first six months of 2022 were $10.1 billion, a 35% increase from the 2021 period, primarily due to the Cooper Tire merger, improvements in price/mix, higher volume and increased sales from other tire-related businesses.

Tire unit volumes totalled 90.6 million, up 25% from 2021. Replacement tire shipments increased 29%. This growth included additional tire unit volume related to the Cooper Tire merger, which closed on June 7, 2021, the benefit of stronger industry demand and growth in Goodyear’s legacy business. Original equipment volume increased 13%, driven by higher vehicle production and new fitments.

Goodyear’s net income was $262 million (91 cents per share) compared to a net income of $79 million (32 cents per share) in the prior year’s period. The first half of 2022 included several significant items, including, on a pre-tax basis, a one-time gain of $95 million on a sale and leaseback transaction related to retail properties in America and a gain of $14 million related to a tariff-rate change, partially offset by rationalization charges of $37 million and pension settlement charges of $18 million. 

Goodyear’s adjusted net income for the first six months of 2022 was $236 million (83 cents per share), compared to an adjusted net income of $184 million (76 cents per share) in the prior year’s period. Per share amounts are diluted.

The company reported segment operating income of $667 million for the first six months of 2022, up $142 million from a year ago. The company also reported merger-adjusted segment operating income of $683 million, which excludes certain costs triggered by the Cooper Tire merger, up $108 million from the prior year. According to Goodyear, the increase in segment operating income primarily reflects the impacts of improvements in price/mix, the Cooper Tire merger, including the non-recurrence of other transaction-related items in the prior year, and higher volume. 

These factors were partly offset by higher raw material costs as well as inflationary cost pressures in wages, benefits, energy and transportation.

 

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