Goodyear Tire (GT 34.50, +1.03) has jumped 3.1% in pre-market after beating fourth quarter expectations.
The tiremaker reported above-consensus fourth quarter earnings of $0.99 per share on an 8.8% year-over-year increase in revenue to $4.07 billion, which was also ahead of estimates.
The revenue growth rate was fueled by improved price/mix, favorable currency translations, and favorable volume. Global revenue per tire increased 5.0%, excluding foreign exchange translations.
Total tire unit volume increased 2.0% year-over-year to 42 million. The increase was comprised of a 3.0% growth in replacement tires and a 1.0% increase in sales to auto manufacturers.
Segment operating income declined 12.5% to $419 million due to higher raw material costs and the unfavorable impact of lower production on cost. These negatives were partially offset by an improved price/mix, net cost savings, and higher volume.
Looking at the geographic breakdown, sales in the Americas rose 6.0% to $2.18 billion with tire units increasing 4.3% to 19.5 million. Replacement tire shipments increased 5.0% with U.S. consumer replacement shipments growing 8.0%. Original equipment volume was unchanged. Segment operating income fell 29.0% to $209 million due to higher raw material costs and increased costs resulting from lower production.
Sales in Europe, Middle East, and Africa rose 11.7% to $1.26 billion even though tire units decreased 2.8% to 13.7 million. Replacement tire shipments rose 2.0% while original equipment volume declined 12.0%. Segment operating income rose 15.0% to $93 million thanks to a better price/mix and cost savings.
Asia Pacific sales increased 13.7% year-over-year to $623 million while tire units rose 4.8% to 8.8 million. Replacement tire shipments were unchanged while original equipment unit volume increased 12.0%. Segment operating income grew 14.0% to $117 million, representing a quarterly record thanks to an improved price/mix and volume.
Looking ahead, the company expects that its segment operating income for fiscal year 2018 will be between $1.80 billion and $1.90 billion. Goodyear expects that segment operating income will be between $2.00 billion and $2.40 billion in 2020.