“As a result of the consistent and strong execution of our Goodyear Forward transformation plan, we successfully achieved four consecutive quarters of segment operating margin expansion. These tangible results are not only a testament to the talent of our team, but also to the strong foundation of Goodyear,” said Chief Executive Officer and President Mark Stewart.  “Throughout the company, we are delivering solid results. Due to the strong momentum underway, we are increasing our target for gross run-rate gains from Goodyear Forward to $1.5 billion by the end of 2025.”

“This increase will enable us to realize significant year-over-year earnings benefits in both 2024 and 2025 from the program,” continued Stewart. “We have raised our guidance for 2024 Goodyear Forward gross benefits to $450 million and we continue to expect an additional $750 million of year-over-year gross benefits in 2025. We remain confident we will achieve our 10% SOI margin and 2.0x – 2.5x leverage targets in the fourth quarter of next year.”

The Goodyear Forward transformation plan was announced in November 2023 to create a more profitable enterprise and drive shareholder value creation. Run rate cost reduction and top line benefits have been increased by $200 million above the original $1.3 billion target. The company continues to expect to realize gross proceeds in excess of $2 billion from portfolio optimization and reaffirms its commitment to net leverage of 2.0x – 2.5x by the end of 2025.

Goodyear’s third quarter 2024 sales were $4.8 billion, with tire unit volumes totaling 42.5 million. Third quarter 2024 Goodyear net loss was $34 million (12 cents per share) compared to a Goodyear net loss of $89 million (31 cents per share) a year ago. The third quarter of 2024 included several significant items including, on a pre-tax basis, an intangible asset impairment of $125 million, Goodyear Forward costs of $25 million and rationalization charges of $11 million. The third quarter of 2023 included pre-tax rationalization charges of $198 million. The intangible asset impairment includes a significant reduction in the carrying value of the company’s tier three Mastercraft and Roadmaster brands given lower volume as a result of increased competition in opening price points in the U.S. market and plans under Goodyear Forward to increase overall profitability. Goodyear Forward costs are comprised of advisory, legal and consulting fees and costs associated with planned asset sales.

Third quarter 2024 adjusted net income was $105 million compared to adjusted net income of $104 million in the prior year’s quarter. Adjusted earnings per share was $0.37, compared to $0.36 in the prior year’s quarter. Per share amounts are diluted.

The company reported segment operating income of $347 million in the third quarter of 2024, up $11 million from a year ago. The increase in segment operating income reflects benefits of $123 million from the Goodyear Forward transformation plan and $17 million from insurance proceeds, net of current year expenses, primarily related to storm damage in prior years. These were partly offset by the impact of lower tire volume of $74 million and inflation of $53 million.

Additional earnings materials can be found on Goodyear’s investor relations website at http://investor.goodyear.com.

Year-to-Date Results

Goodyear’s sales for the first nine months of 2024 were $13.9 billion with tire unit volumes totaling 123.0 million. First nine months 2024 Goodyear net loss was $6 million (2 cents per share) compared to a Goodyear net loss of $398 million ($1.40 per share) a year ago. The year over year improvement was driven by increases in segment operating income. The first nine months of 2024 also included several significant items including, on a pre-tax basis, an intangible asset impairment of $125 million, Goodyear Forward costs of $92 million, rationalization charges of $52 million, and a benefit of $87 million from asset and other sales. The first nine months of 2023 included, on a pre-tax basis, rationalization charges of $302 million and a $58 million benefit from asset and other sales.

First nine months 2024 adjusted net income was $189 million compared to an adjusted net loss of $75 million in the prior year. Adjusted earnings per share was $0.66, compared to a loss of $0.26 in the prior year.

The company reported segment operating income of $933 million for the first nine months of 2024, up $348 million from a year ago. The increase in segment operating income reflects benefits of $285 million from the Goodyear Forward transformation plan, $235 million from net price/mix versus raw material costs, $69 million from insurance proceeds, net of current year expenses, and $55 million from the 2023 negative impact of the Tupelo storm. These were partially offset by lower tire volume of $143 million and a net headwind of $116 million from inflationary costs.

First nine months 2024 total cash flows from operating activities was a use of $591 million compared with a use of $204 million in the first nine months of 2023.

Reconciliation of Non-GAAP Financial Measures

See “Non-GAAP Financial Measures” and “Financial Tables” for further explanation and reconciliation tables for historical Total Segment Operating Income and Margin; Adjusted Net Income (Loss); and Adjusted Diluted Earnings per Share, reflecting the impact of certain significant items on the 2024 and 2023 periods.

Business Segment Results

AMERICAS                 

Americas’ third quarter 2024 sales of $2.9 billion were 8.4% lower, driven by declines in replacement volume. Tire unit volume decreased 8.3%. Replacement tire unit volume decreased 11.3%, reflecting industry member declines in the U.S. and actions taken to reduce exposure in the low-end of the market. The U.S. industry non-members, generally representing low-cost imported product, grew significantly in the quarter. Original equipment unit volumes were up 7.9%, reflecting new fitment wins.

Third quarter 2024 segment operating income of $251 million decreased $7 million from the prior year’s quarter. The decrease was driven by lower volume, inflation, and unfavorable price/mix and raw material costs. These headwinds were largely offset by Goodyear Forward savings and insurance proceeds related to storm damage in prior years.

EMEA

EMEA’s third quarter 2024 sales of $1.3 billion were 1.9% lower, driven by tire volume declines and the negative impact of changes in foreign currency exchange rates, partially offset by favorable price/mix. Tire unit volume decreased 2.9%. Original equipment unit volumes decreased 5.6%, reflecting lower OEM production. Replacement tire unit volume decreased 2.1%, driven by decreased volume in smaller rim sizes. 

Third quarter 2024 segment operating income of $24 million was up $2 million compared to the prior year’s quarter. Segment operating income benefitted from the Goodyear Forward plan and favorable net price/mix versus raw material costs. These benefits were partly offset by inflation, other costs, and unfavorable fixed overhead absorption.

ASIA PACIFIC

Asia Pacific’s third quarter 2024 sales decreased 4.6% to $618 million, driven by lower replacement volume. Tire unit volume decreased 5.4%. Replacement tire unit volume decreased 13.0%, driven by declines in our key markets, including Australia, China and India. Original equipment unit volume increased 3.6%, driven by growth in EV fitments.

Third quarter 2024 segment operating income of $72 million was up $16 million from prior year driven by benefits from Goodyear Forward, favorable net price/mix versus raw material costs, and lower net inflationary costs. These factors were partly offset by lower volume. 

Conference Call

The Company will host an investor call on Tuesday, November 5 at 8:30 a.m. ET. Please visit Goodyear’s investor relations website: http://investor.goodyear.com, for additional earnings materials.

Participating in the conference call will be Mark W. Stewart, chief executive officer and president, and Christina L. Zamarro, executive vice president and chief financial officer.

The investor call can be accessed on the website or via telephone by calling either (800) 343-4849 or (203) 518-9848 before 8:25 a.m. and providing the conference ID “Goodyear.” A replay will be available by calling (888) 566-0831 or (402) 220-0121. The replay will also be available on the website.