Goodyear Tire & Rubber Co.’s sales during the first quarter of 2020 totaled $3 billion, down from $3.6 billion recorded one year ago, according to “preliminary results” shared by the Akron, Ohio-based tiremaker today.
During the quarter, Goodyear says its overall tire volume fell 18% from prior-year levels to 31 million units.
Goodyear also expects to report a loss before income taxes of $185 million to $195 million for the first quarter of 2020, plus an adjusted net loss – before income taxes – of $175 million to $185 million, excluding accelerated depreciation charges incurred during the period.
Results include a $65 million “unfavorable impact driven by lower factory utilization and other period costs, both directly related to shutting down its manufacturing facilities,” according to Goodyear officials.
The company announced shutdowns at its North, Central and South American factories last month. Most of Goodyear’s manufacturing facilities in the Americas and Europe, as well as several plants in Asia, remain closed. (The firm's plant in Pulandian, China, is operating “with 100% of its workforce.”)
In a statement released today, Goodyear attributed declines to drops in “global OE tire shipments after auto manufacturers halted production and weak replacement demand following sweeping shelter-in-place mandates” due to the COVID-19 crisis.
Goodyear says it is planning “a phased restart of production during the second quarter, beginning in April with some of its commercial truck tire facilities in the U.S. and Europe. Decisions to resume production will be based on an evaluation of market demand signals, inventory and supply levels, as well as the company’s ability to safeguard the health of its associates.”
In related news, Goodyear has elected to suspend its quarterly dividend and reduce its capital expenditures in an effort to “enhance liquidity.”
It also has successfully refinanced its primary revolving credit facility in the U.S., which will enhance “our financial flexibility,” says Darren Wells, Goodyear’s executive vice president and chief financial officer.
Goodyear Chairman, CEO and President Rich Kramer says the company is “proactively taking actions to mitigate the impact of the sharp decline in industry demand on our profitability and financial position.”