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Goodyear 2020 Net Sales Decline 16%, But Trending Up

The Goodyear Tire & Rubber Company’s 2020 net sales were $12.3 billion, a 16% decline from the 2019 period; fourth quarter 2020 sales were $3.7 billion, down 2% from a year ago. The company says the decline was driven by lower volume and unfavorable foreign currency translation. These factors were partially offset by improvements in price/mix.

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Fourth-quarter tire unit volumes totaled 37.7 million, down 5% from the prior year’s period. Industry demand during the quarter was affected by the continued economic disruption resulting from the COVID-19 pandemic. Replacement tire shipments declined 7%, reflecting the impact of lower consumer demand and actions taken to align European distribution. Original equipment unit volume increased 3%, reflecting increased market share in Americas and EMEA.

Goodyear’s fourth quarter 2020 net income was $63 million compared to a net loss of $392 million a year ago. Fourth-quarter 2020 adjusted net income was $103 million compared to adjusted net income of $45 million in 2019.

The company reported segment operating income of $302 million in the fourth quarter of 2020, up $60 million from a year ago. The increase primarily reflects the benefits of cost-saving actions, including ongoing rationalization plans, lower raw material costs, a one-time benefit related to a legal settlement and improvements in price/mix, Goodyear says. These factors were partially offset by lower volume and the impact of reduced factory utilization.

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“We delivered strong performance to end a challenging year,” said Richard J. Kramer, chairman, chief executive officer and president. “With a determination to win with our products in the marketplace and a relentless focus on cost and cash, we finished the year on a high note.

“We have good momentum as we enter 2021. Our commercial business continues to outperform the industry, our consumer replacement business is strengthening, and we are beginning to see the benefits of our robust consumer OE pipeline. I am confident we are positioned to capitalize on stronger industry fundamentals in 2021,” added Kramer.

Goodyear’s Full-Year Results

Goodyear’s 2020 net sales were $12.3 billion, a 16% decline from the 2019 period, reflecting lower volume, reduced sales from other tire-related businesses and unfavorable foreign currency translation, Goodyear said, adding these factors were partially offset by improvements in price/mix.

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Tire unit volumes totaled 126.0 million, down 19% from 2019. Industry demand was affected by the economic disruption resulting from the COVID-19 pandemic, particularly during the first half of 2020, Goodyear said. Replacement tire shipments decreased 17%, primarily reflecting lower industry demand. Original equipment volume declined 23%, driven by lower global vehicle production.

Goodyear’s net loss was $1.3 billion compared to a net loss of $311 million in the prior year’s period. Goodyear said the 2020 period included several significant items, including, on a pre-tax basis, a non-cash charge of $295 million related to a valuation allowance on certain deferred tax assets for foreign tax credits, a non-cash impairment charge of $182 million to reduce the carrying value of goodwill in the EMEA business, a non-cash impairment charge of $148 million to reduce the carrying value of an equity interest in TireHub, and rationalization charges of $159 million, primarily associated with the closure of a manufacturing facility in Gadsden, Alabama.

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Goodyear’s 2019 net loss included discrete tax adjustments of $386 million and pre-tax rationalization charges of $205 million, primarily related to a plan to modernize two tire manufacturing facilities in Germany and a plan to curtail production of tires for declining, less profitable segments of the tire market at its Gadsden, Alabama manufacturing facility. Full-year 2020 adjusted net loss was $448 million compared to adjusted net income of $253 million in the prior year.

The company reported a segment operating loss of $14 million in 2020, down $959 million from a year ago. Goodyear said the decrease was primarily due to lower volume, reduced factory utilization and lower earnings from other tire-related businesses. These factors were partially offset by the benefits of cost-saving actions, including ongoing rationalization plans, and lower SAG, driven by reduced payroll and advertising expenses, the company said.

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