Q2 2024 Goodyear Tire & Rubber Co Earnings Call Transcript
Key Points
- Goodyear Tire & Rubber Co (GT) achieved significant margin expansion in the second quarter, with segment operating income margin reaching 7.4%, nearly triple the margin from the same period last year.
- The company reported strong year-over-year earnings growth, with EPS on a reported basis increasing by over $1 and adjusted EPS growing by $0.53.
- Goodyear's Americas segment saw remarkable gains, with segment operating income up nearly $140 million from the previous year.
- The Asia Pacific region demonstrated significant growth, achieving its third consecutive quarter of segment operating income margin above 10%, driven by fitment wins in the consumer OE market, particularly in the electric vehicle segment.
- Goodyear Forward initiatives contributed $90 million in the quarter, with benefits largely driven by purchasing initiatives and efficiency improvements.
- Sales for the second quarter totaled $4.6 billion, down 6% from the previous year, primarily due to lower volume and unfavorable price mix.
- Overall replacement volume declined by 7%, driven by decreases in the Americas, with the US replacement industry distorted by an 18% increase in low-end imports.
- The company faced challenges in smaller rim sizes, where imports have taken shelf space, and the liquidity of large distributors around the Americas has been affected.
- In Latin America, Goodyear experienced temporary volume softness due to distribution changes and flooding in Brazil, impacting earnings.
- The consumer replacement industry in China was weaker than expected, affecting the Asia Pacific region's performance despite overall growth.
Good morning. My name is Ashley, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Goodyear's second-quarter 2024 earnings call. (Operator instructions) Please note that this call may be recorded.
It is now my pleasure to turn the conference over to Greg Shank, Senior Director, Investor Relations.
Thank you, Ashley. Good morning, and welcome to our second quarter 2024 earnings call. Today on the call we have Mark Stewart, our CEO and President; and Christina Zamarro, our Executive Vice President and CFO.
During this call, we will refer to forward-looking statements and non-GAAP financial measures. Forward-looking statements involve risks, assumptions and uncertainties that could cause actual results to differ materially from those forward-looking statements. For more information on the most significant factors that could affect future results, please refer to slide 20 of the supporting presentation for today's call in our filings
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