Goodyear Reports Fourth Quarter, Full-Year 2017 Results; Company Outlines Financial Targets, Capital Allocation Plan

February 8, 2018 by Goodyear Tire & Rubber Company

•Net sales of $4.1 billion for the fourth quarter up 9%, $15.4 billion for full-year

•Global revenue per tire up 5% for fourth quarter, up 4% for full-year

•Full-year Goodyear net income of $346 million

•Company exceeds full-year segment operating income target of $1.5 billion

•Full-year cash flow from operating activities of $1.2 billion

•Strong fourth quarter volume recovery with U.S. consumer replacement up 8%, EMEA up 2%

•Record volume, operating income in Asia Pacific

•Company announces 2020 segment operating income target, capital allocation plan

AKRON, Ohio, February 8, 2018 – The Goodyear Tire & Rubber Company today reported 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.'

'These results reflect the power of the Goodyear brand across all of our regions,' Kramer added. 'Our strong global brand is integral to Goodyear's connected business model which combines innovation and technology leadership, industry-leading products, aligned wholesale and retail distribution and provides us with a competitive advantage.'

'Looking ahead to 2020, I am very confident in our capability to execute our long-term strategy to capture profitable growth in key market segments and deliver significant growth in earnings,' he added.

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. Excluding currency translation, global revenue per tire increased 5 percent.

Tire unit volumes totaled 42 million, up 2 percent from 2016. Replacement tire shipments were up 3 percent. Original equipment unit volume was down 1 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. In addition, the company recognized discrete tax benefits of $331 million in 2016 primarily due to the release of foreign valuation allowances. Fourth quarter 2017 adjusted earnings per share was 99 cents, compared to 95 cents in 2016. Per share amounts are diluted.

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.

Full-Year Results

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.

Reconciliation of Non-GAAP Financial Measures

See the note at the end of this release for further explanation and reconciliation tables for Segment Operating Income and Margin; Adjusted Net Income; and Adjusted Diluted Earnings per Share, reflecting the impact of certain significant items on the 2017 and 2016 periods.

posted on conceptcarz.com

Goodyear Reports Fourth Quarter, Full-Year 2017 Results; Company Outlines Financial Targets, Capital Allocation Plan

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