Goodyear Increases Q2 Sales, Credits Cooper Tire Merger

Goodyear Increases Q2 Sales, Credits Cooper Tire Merger

The Goodyear Tire & Rubber Co. reported a 31% sales increase from a year ago in its second quarter financial results, released last week.

In its financial results, Goodyear credited the uptick in sales, which were $5.2 billion in Q2, to the Cooper Tire merger, improvements in price/mix, higher volume and increased sales from other tire-related businesses.

“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, CEO and president. “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.”

Tire unit volumes totaled 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 and growth in our legacy business, Goodyear says.

Goodyear’s second quarter 2022 net income was $166 million compared to net income of $67 million a year ago. Goodyear says 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 the Americas 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.

Second quarter 2022 adjusted net income was $131 million compared to adjusted net income of $79 million in the prior year’s quarter.

The company reported a segment operating income of $364 million in the second quarter of 2022, up $65 million from a year ago. The company also reported a merger-adjusted segment operating income of $372 million, which excludes certain costs from 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. Goodyear says 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.

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 totaled 90.6 million, up 25% from 2021, Goodyear’s financial report says. Replacement tire shipments increased 29%. This growth included additional tire unit volume related to the Cooper Tire merger, 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 compared to net income of $79 million in the prior year’s period. Goodyear’s adjusted net income for the first six months of 2022 was $236 million, compared to an adjusted net income of $184 million in the prior year’s period.

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.

Business Segment Results: Americas

Goodyear reported Americas’ second quarter 2022 sales of $3.1 billion were nearly 40% higher than in 2021, driven by the Cooper Tire merger, improvements in price/mix and increased sales from other tire-related businesses. Tire unit volume increased 22%. Replacement tire unit volume increased 24%, driven by the addition of Cooper Tire volume to the company’s reported results. Original equipment unit volume increased almost 13%, reflecting an improvement in vehicle production

Second quarter 2022 segment operating income of $293 million was up $60 million from the prior year’s quarter. The increase was driven by improvements in price/mix and the Cooper Tire merger. These factors were partially offset by higher raw material costs, inflationary cost pressures 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.

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