AKRON—Goodyear's net income plummeted 54.8 percent to $75 million despite a 3.5 percent increase in net sales of $3.83 billion in the first quarter, ended March 31, compared with the year-ago period.
Tire unit volume totaled 39 million, down 2.5 percent from 2017. OE unit volume fell 4 percent, primarily driven by declines in the smaller than 17-inch rim size segment in the Europe/Middle East/Africa (EMEA) region. Replacement tire shipments slid 2 percent, largely due to reduced industry demand for consumer tires in the U.S. and Europe, Goodyear reported.
The segment operating income dropped 27.9 percent to $281 million in the first quarter due mainly to higher raw material costs, Goodyear said.
"We are pleased with our first-quarter results given higher raw material costs and weaker demand than we expected in the quarter," said Richard J. Kramer, chairman, CEO and president. "These results were highlighted by our performance in the 17-inch-and-larger segment in consumer replacement, which delivered more than double the industry growth in the U.S. and Europe."
The Americas segment's operating income declined 41.2 percent to $127 million as sales dipped 1.5 percent to $1.93 billion due to increased raw material costs, lower price/mix and the effect of 2.9 percent lower volume to 16.7 million units.
Original equipment unit volume fell 3 percent driven by production declines in the U.S. while consumer replacement tire shipments slid 3 percent—still outperforming U.S. Tire Manufacturers Association industry members, who experienced a 5-percent decrease in tire shipments.
EMEA segment sales increased 7 percent to $1.3 billion, due to favorable foreign currency translation and improved price/mix, partially offset by reduced tire volume. Original equipment unit volume fell 14 percent, primarily driven by declines in the less-than-17-inch rim size segment. Replacement tire shipments slid 2 percent, driven by decreased industry demand in the consumer business.