Goodyear Tire & Rubber Co. has reported the results for the fourth quarter and full-year of 2017.
“Our fourth-quarter results were highlighted by our performance in the 17-inch-and-larger segment in consumer replacement, which delivered nearly double the industry growth in the U.S. and Europe,” said Richard J. Kramer, chairman, chief executive officer and president. “Our strong volume recovery in the quarter gives us positive momentum as we head into 2018.”
- Goodyear’s fourth quarter 2017 sales were $4.1 billion, up 9 percent from $3.7 billion a year ago, driven by improved price/mix, favorable currency translation and volume.
- Tire unit volumes totaled 42 million, up 2 percent from 2016. Replacement tire shipments were up 3 percent.
- Goodyear reported a net loss of $96 million in the fourth quarter of 2017 (39 cents per share) compared to net income of $561 million ($2.14 per share) in the year-ago quarter, that was driven by a $299 million one-time, non-cash tax charge related to U.S. tax reform.
The company reported fourth quarter segment operating income of $419 million in 2017, down from $479 million a year ago. The decrease reflects higher raw material costs and the unfavorable impact of lower production on cost, which were partially offset by improved price/mix, net cost savings and higher volume.
- Goodyear’s 2017 sales were $15.4 billion, up 1 percent from 2016, reflecting an increase in price/mix, favorable foreign currency translation and higher sales in other tire-related businesses, which were partially offset by lower volume.
- Tire unit volumes totaled 159.2 million, down 4 percent from 2016. Replacement tire shipments were down 3 percent. Original equipment unit volume was down 6 percent.
- Goodyear’s 2017 net income of $346 million ($1.37 per share) is down from $1,264 million ($4.74 per share) in 2016. The decrease was driven by increased income tax expense, which was primarily due to the recognition of a one-time, non-cash tax charge related to U.S. tax reform in 2017, and lower segment operating income. In addition, the company recognized discrete tax benefits in 2016, primarily due to the release of foreign valuation allowances. Full-year adjusted earnings per share for 2017 was $3.12, compared to $4.00 a year ago.
- The company reported 2017 segment operating income of $1,522 million in 2017, down 23 percent from $1,985 million a year ago. The decrease was primarily attributable to increased raw material costs and the effect of lower volume, which were partially offset by price/mix improvements.
U.S. Tax Reform
Income tax expense in 2017 was $513 million on income before income taxes of $878 million. In 2017, tax expense included a $299 million one-time, non-cash charge primarily driven by the revaluation of U.S. deferred tax assets to the lower tax rate effective under the Tax Cuts and Jobs Act. Given its significant deferred tax assets, the company had not expected to pay cash taxes in the U.S. through 2020. With the change in the corporate tax rate, this time period extends through 2025.