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Dec 31, 2022
Goodyear Q4 2022 Earnings Report
Goodyear experienced weaker industry volume and ongoing pressure from cost inflation, offset by strong price/mix.
Key Takeaways
Goodyear's Q4 2022 net sales increased by 6.3% year-over-year, driven by strong price/mix. However, the company reported a net loss of $104 million, compared to a net income of $553 million in the prior year, due to higher tax expenses and increased cost of goods sold. Adjusted EPS was $0.07, down from $0.57 in the prior year.
Net sales grew 6% compared to Q4 2021, 13% excluding foreign currency.
Goodyear net loss of $104 million; adjusted net income of $20 million.
Segment operating income of $236 million compared to $391 million in prior year.
Strong price/mix of $722 million, exceeded raw material costs by $172 million.
Goodyear
Goodyear
Goodyear Revenue by Segment
Goodyear Revenue by Geographic Location
Revenue by Segment
Americas Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.comRevenue by Geographic Location
Americas Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.com Forward Guidance
First quarter results are expected to be impacted negatively by the effects of softer industry volume and the ongoing effects of inflation, partly offset by the continued benefits of price/mix.
Positive Outlook
- Improvements in price/mix to exceed raw material cost increases, with a net benefit of ~$100 million.
- Consumer OE volume is expected to grow on continued industry recovery and market share gains.
- Raw material costs to be higher than prior year by approximately $300 million, an improvement from levels impacting the second half of 2022.
- First quarter 2022 consumer replacement industry sell-in was up approximately 5% from prior year and a strong comparable
- Drivers of consumer demand relatively stable with recent U.S. miles driven indicators approximately flat
Challenges Ahead
- Overall unit volumes impacted by softer industry conditions, down approximately 5% (primarily consumer and commercial replacement).
- Lower production in the fourth quarter totaling 3.5 million units will impact first quarter unabsorbed overhead.
- Impact from calculated and excess (non-raw material) inflation in the first quarter to be approximately $175 million compared with the first quarter of 2022.
- Operating tax rate to remain elevated (similar to the fourth quarter), although it will remain sensitive to movements in income across geographies.
- First quarter free cash flow is expected to be a use of cash, consistent with historical seasonality.
Revenue & Expenses
Visualization of income flow from segment revenue to net income