The Goodyear Tire & Rubber Company reported results for the fourth quarter and full year of 2020.
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Goodyear's fourth quarter 2020 sales were $3.7 billion, down 2% from a year ago.
The decline was driven by lower volume and unfavorable foreign currency translation.
These factors were partially offset by improvements in price/mix.
Tire unit volumes totaled 37.7 million, down 5% from the prior year's period.
Industry demand during the quarter was affected by the continued economic disruption resulting from the COVID-19 pandemic.
Replacement tire shipments declined 7%, reflecting the impact of lower consumer demand and actions taken to align European distribution.
Original equipment unit volume increased 3%, reflecting increased market share in Americas and EMEA.
Goodyear's fourth quarter 2020 net income was $63 million (27 cents per share) compared to a net loss of $392 million ($1.68 per share) a year ago.
Fourth quarter 2020 adjusted net income was $103 million (44 cents per share) compared to adjusted net income of $45 million (19 cents per share) in 2019.
Per share amounts are diluted.
The company reported segment operating income of $302 million in the fourth quarter of 2020, up $60 million from a year ago.
The increase primarily reflects the benefits of cost saving actions, including ongoing rationalization plans, lower raw material costs, a one-time benefit related to a legal settlement and improvements in price/mix.
These factors were partially offset by lower volume and the impact of reduced factory utilization.
Full-Year Results
Goodyear's 2020 net sales were $12.3 billion, a 16% decline from the 2019 period, reflecting lower volume, reduced sales from other tire-related businesses and unfavorable foreign currency translation.
These factors were partially offset by improvements in price/mix.
Tire unit volumes totaled 126.0 million, down 19% from 2019.
Industry demand was affected by the economic disruption resulting from the COVID-19 pandemic, particularly during the first half of 2020.
Replacement tire shipments decreased 17%, primarily reflecting lower industry demand.
Original equipment volume declined 23%, driven by lower global vehicle production.
Goodyear's net loss was $1.3 billion ($5.35 per share) compared to a net loss of $311 million ($1.33 per share) in the prior year's period.
The 2020 period included several significant items, including, on a pre-tax basis, a non-cash charge of $295 million related to a valuation allowance on certain deferred tax assets for foreign tax credits, a non-cash impairment charge of $182 million to reduce the carrying value of goodwill in the EMEA business, a non-cash impairment charge of $148 million to reduce the carrying value of an equity interest in TireHub, and rationalization charges of $159 million, primarily associated with the closure of a manufacturing facility in Gadsden, Alabama.
Goodyear's 2019 net loss included discrete tax adjustments of $386 million and pre-tax rationalization charges of $205 million, primarily related to a plan to modernize two tire manufacturing facilities in Germany and a plan to curtail production of tires for declining, less profitable segments of the tire market at our Gadsden, Alabama manufacturing facility.
Full-year 2020 adjusted net loss was $448 million ($1.91 per share) compared to adjusted net income of $253 million ($1.08 cents per share) in the prior year.
Per share amounts are diluted.
The company reported a segment operating loss of $14 million in 2020, down $959 million from a year ago.
The decrease was primarily due to lower volume, reduced factory utilization and lower earnings from other tire-related businesses.
These factors were partially offset by the benefits of cost saving actions, including ongoing rationalization plans, and lower SAG, driven by reduced payroll and advertising expenses. ■