GT - Earnings call transcript Q2 2024 | The Goodyear Tire & Rubber Company

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Operator

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 Second Quarter 2024 Earnings Call. [Operator Instructions]. Please note that this call may be recorded. pleasure Director, the Investor my Greg over now Senior Shank, Relations. is to conference turn to It

Greg Shank

Thank you, call, Ashley. Christina second Stewart, quarter Good CEO Zamarro, morning, and earnings our President Today welcome our call. Executive on and President; the and we Vice Mark XXXX have and to CFO. our

we will call, statements this to forward-looking and non-GAAP During refer financial measures.

from assumptions cause actual differ materially Forward-looking could results that statements those and involve statements. uncertainties risks, forward-looking to

financial measures future our affect please most presentation over materials significant the on comparable that, measures to our factors the replay Slide a presentation. also of turn investor.goodyear.com, on is more of refer SEC. website call the discussed found call For on XX to where could available. to this information the of for that will today's non-GAAP also filings today's These GAAP call results, the in will now supporting With be at that be Mark. call can the and included I appendix of A reconciliation with

Mark Stewart

by want second of the our earnings clearly growth. quarter key start In work year-over-year and as your Thank that second Plan, fronts the to interest another we is each Forward strong and as margin our you for call. Goodyear Goodyear. expansion, and Plan. in our of Thank everyone. Forward as streams of true achieved on progressing well you in quarter on I Welcome multiple our Greg, good Goodyear joining significant of morning for are morning, this us, you, saying part earnings we thank to goals quarter,

To our In step second to the will part been and segments as as we and the as not are that been continue through the for as well as focus execution and of announced by overall plan. Having the cost we we to industry appropriate replacement market that of as another the the including generating has our profitable OTR challenge areas that, execute the recently the business, supportive, clear, environment, plans. OEM efforts. in our just volume reduction has off-the-road have base ensure said half continue the in which a our good make transformation be We're our us continue sale well operating very year continuing our that saturated significantly will highest the imports. production to half. cost objectives levels environment first challenging result, on markets, forward make industry of more low-end adjustments to anticipating downgrades We return and important of

making are to that these great We deeper. need continue means will dig recent already to we challenges and progress

our We to achieve will execute to continue goals. to continue

on the Moving to financials.

which margin been basis, margin EPS on reported X.X%, Our And operating $X. operating $XXX million is adjusted by income second we EPS over quarter segment our income strong. the and Clearly, a in quarter basis grew on almost second was triple delivered the an segment was execution $X.XX. has of XXXX. increased

digits activities channel U.S. heavy forward savings performance Goodyear a at in last from Our was This $XXX retailers. market. two growth the units, taken of digit the sizes, well around imports at of traditional as rim In sellout and strong in and in to by quarter on the nearly as raw and line demonstrating with was U.S., SOI this the year. remarkable story high up end large with saw have With our manufacturers the low contributing strong the segment lower million the with results Americas. space earnings. Americas retail versus our Magnifying where shelf and promotional down instigated price/mix during negative stepped of challenge, gains industry materials distributors show single different Greater the the smaller XX-inch other liquidity volume double up results business in in industry.

complexity platforming focus as continue of reduction, at looking our end on market. as to in the well the We the blank high spaces

in to of us. work We are front continuing

market. As margin enhancement rationalizations reduce, me, low-margin, as part the we profitability This increasingly work part in margins, X market In to to plan to strong, exposure -- us flooding on we Tier for early as result boost very good volume position execute our QX. temporary the in excuse products our our X America. Goodyear well continue continue happened we some segments about and competitive in in of but as of address Tier distribution experienced of Earnings our as important actions softness a Latin is the we SKU making Forward reach Brazil to changes we to Latin that quarter Plan. remaining to low-value as of the to as the America, we're therefore feel

results EMEA, that despite In were OE relatively stable an contracted X%. industry

product and to technology. Importantly, continue we industry-leading innovation demonstrate

rewarded second Vector us segment the the test have lines been winner in ADAC. was and all drive growth in several for fast-growing Gen-X help mix next the Like the quarters. imports, U.S., product particularly Europe. should and the Goodyear brands quarter, this lower-tier price our Eastern season hurt During This over by in in by EMEA's

related cost were address announced in we which region, our finalize previously to closures Over structure the the the our EMEA. factory consultations past to quarter, in help will able required

consumer above significant that, weaker third growth Asia growth than was fitment its in continued by quarter in expected. was in in and wins OE replacement margin consumer SOI see driven consecutive both we to primarily vehicle industry volume Having electric and earnings XX%. turned the Volume EV, market China said of Pacific the and segment.

for the standard So continues set to performance. Asia Pacific

speed making progress with services is are roadblocks our Goodyear manufacturing, reviewing removed. Forward towards We've our critical. that to services. regularly our It's our In great we've and are with Turning shared open Rica recently meet of progress sure plan shared to Forward. SAG, to I a made transition leaders Americas. In Goodyear any in also EMEA Plan factory to announced execution just the clear center a new against and the Costa for plans efficiency Christine in continuing

OE able couple been of the achieve yield example, one of last levels to record has months. the just team over As

performance We of And focused premium our of XX%. platforms finally, for using we our Germany lower SKUs this property We're through as we spending, base, executing efficiency to piece benchmark hours tight optimizations same the we're by both and with of valuable focused this operations, in market, ahead industrializing our are our customers level on returns. on time, example, plan in are in XX quarter. team across new cost and consolidating our of mile one parts and incremental estate in also by seeing reduction achieved well. R&D, We've doing the These is retail implemented process covering we portfolio. our proposition -- of the value on going the over tools overtime tier early on SAG And sale through and traditional At real reported types have address our continue last we've By structure driving will forward. In into optimizing focusing controls the cascading a base. common world. execution retail traffic customer Americas product as fleet we manufacturing June, SKUs.

of year. in remain Goodyear Forward. of margins committed We target We are to our delivering next confident SOI XX% by fully end the

to second financials, quarter to Q&A it turn and to over on section. the you take through I'll the move Christina we'll Now

Christina Zamarro

sales versus Thank truck income quarter Slide Americas. The $XXX million weakness on totaled from After $XXX million, continuing for $X.XX Overall up you, year, adjusting down are from increased drivers Mark. volume volume equipment our unfavorable shown indexed up and Sales Unit significant to per Segment second driven volume volume X. decreases in operating share year. with $X.X X% a year by last the due up I'll driven Slide a and basis. replacement begin of X% lower quarter commercial in X. on year-over-year lower X%, by income $X.XX declined RMI agreements. for our Original year-over-year items, earnings XX%. the was earnings on was the ago. mix and last was billion, by statement price OE

related current driven storm volume to first quarter mix X%. lower the materials raw our quarter. by netted quarter, period was costs the recoveries $XX was other of with fire utilization impacted by lower offset million, of $XXX Debica contributed about a for pricing was in benefited depreciation the Price/mix from expenses of customers. million. Insurance of million primarily tire a lower $XX initiatives Inflation income $XX were the raw stable. The our the benefit Forward negative was and quarter, million, a of $XX $XX in facility million contractual XXXX and impact of headwind and was Segment of versus The nonrecurrence advertising, transportation. Tupelo related SOI of expenses $XX a that operating adjustments by benefit benefit was from Goodyear $XX with material the This compensation of or by Tupelo unit price facility, net million driven was pricing $XX $XX in our million. benefits was factory reflects favorable quarter. initiatives. costs largely Sequential partly favorable tornado purchasing the million. the Other with in million driven million OE

$XX last year. of which a million was flow cash reductions $X.X use the Turning unusually of million totaled flat Slide of was impact year, and during relatively materials our the last quarter, cash with of shutdown reflected inflow inventory billion end last Working Free debt a cash an compared raw inflow storm-related capital of quarter second Tupelo use to compared the the the XX. strong to factory. at declining $XXX to of Net year. following a

on driven decreased second our X% volume SBU X.X starting Moving or unit million volume. replacement Americas to Slide units, quarter XX. and by results

While volume, distorted nonmember the volume second year, has increase This the Industry represented is an primarily this a tire overall by lower was was XX% branded by during all-time on high. industry grew which year-over-year quarter, in result basis. reached low-end slightly large import companies member an imports. U.S. replacement

Latin deliberate totaled America storm of net Tupelo an increase materials, from the lower addition, sales, versus Segment transportation $XXX Goodyear which our declined earnings execution X% the more and shifts offset Forward $XXX and reflecting or raw higher million benefited recovery million. Americas in of following distribution price/mix In of volume. volume than nearly our initiatives, from imports. lower operating rates, income in

volume unit replacement. by or XX. decreased Slide quarter to second XXX,XXX EMEA's driven units X% Moving

up materials, Our recoveries inflation. from unfavorable volume year net period in operating and response versus insurance Segment the to of fixed net than Western hyperinflation pricing in declining $XX ago. Favorable the was more and growth Goodyear in volume Forward price million a related higher reflects expenses offset East. Turkey, Europe, following million Particularly actions income actions current our continued in absorption raw in country. but mix $XX overhead and

XX. Slide on Turning Pacific to Asia

increased by volume Agent unit These X% of costs. China. from versus Segment $XX prior increase totaled operating raw favorable or quarter driven and XXX,XXX growth Second income million benefited volume an of Goodyear price partly net Forward higher materials, and units, $XX initiatives. by million year. in XX.X% were offset mix OE benefits inflationary sales, earnings versus

on our outlook Turning Slide to XX.

revised our to We half volume have of outlook our for reflective be more full first year experience. unit

We expect global be unit X%. down to third volume approximately quarter

seeing mentioned, driven on In million lower quarter. And Raw million will expect execution inflation forward, which approximately the quarter. $XX Other during we approximately $XX have addition, each full mix. we second materials net other Mark to outlook quarter. financial million, the the in we'll year volume for offset of in a With your questions. open recent an been that, third Goodyear price costs Inflation Strong higher of to SOI expected of XX our our the Forward approximately we're increase work drive and most of expect as assumptions Slide increased general great headwind benefit updated on $XX streams. with be production across during $XXX expectations. improvements to the reflecting will costs X% reflect progress million, our unabsorbed we've for fixed reflecting Goodyear line and also by are

Operator

Instructions]. [Operator

remarks. phone. to your mute questions first John the appear your from be is our on open. to with Healy Instructions]. your Please for speakers no question We closing this there the call And [Operator time. function take check line Research. Northcoast at John I'll any will turn Healy,

Christina Zamarro

All one have do handful right. analysts Thank another who operator. between transitioning and a of you, jobs out. We are

certainly for with questions, you Thank any we us today follow have can and later up tomorrow. joining. Goodbye. you If

Operator

this participation. And you. you program. for Thank conclude your will Thank today's

You may disconnect at time. any

The Goodyear Tire & Rubber Company (GT) 1 Aug 242024 Q2 Earnings call transcript