"We delivered solid net income and record core segment operating income in 2016, driven by strong performance in our Americas and Asia Pacific consumer tire businesses," said Chairman Rich Kramer. "Our results demonstrate continued sustainable earnings growth and disciplined execution of our strategy.
"While we expect raw material inflation to be a significant headwind in 2017, the combination of Goodyear's innovation leadership, award-winning products and strong global brand creates an industry-leading value proposition and competitive advantage," Kramer said. "We've demonstrated that we have been able to successfully offset raw material inflation over time.
"We remain confident in our strategy of capturing profitable growth in key segments of the market and in delivering our 2020 targets."
Goodyear's fourth quarter 2016 sales were $3.7 billion, down from $4.1 billion a year ago, with the decrease driven by the deconsolidation of the company's subsidiary in Venezuela.
Tire unit volumes totalled 41.1 million, down 2 percent from 2015. Replacement tire shipments were down 1 percent. Original equipment unit volume was down 7 percent, driven in part due to weakness in the U.S. commercial truck market.
Goodyear's fourth quarter 2016 net income was $561 million ($2.14 per share), compared to a net loss of $380 million ($1.42 per share) in the year-ago quarter. The prior year was negatively impacted by a charge to deconsolidate Venezuela. Fourth quarter 2016 adjusted net income was $249 million (95 cents per share), compared to $257 million (93 cents per share) in 2015. Per share amounts are diluted.
The company reported fourth quarter segment operating income of $479 million in 2016, compared to $480 million a year ago. Segment operating income in 2016 benefited from net cost savings, which was more than offset by lower price/mix net of raw material costs, lower volume and the deconsolidation of Venezuela. Core segment operating income, which excludes Venezuela, was $458 million in the year-ago quarter.
Full-Year Results
Goodyear's 2016 sales were $15.2 billion, down 8 percent from 2015, primarily reflecting the deconsolidation of Venezuela and unfavourable foreign currency translation.
Tire unit volumes totalled 166.1 million, essentially unchanged from 2015. Replacement tire shipments were up 2 percent. Original equipment unit volume was down 4 percent. Excluding the impact of the deconsolidation of Venezuela, unit volumes increased 1 percent.
Goodyear's 2016 net income of $1.3 billion ($4.74 per share) is up from $307 million ($1.12 per share) in 2015. The increase was driven by a charge in 2015 to deconsolidate Venezuela and a decrease in 2016 income tax expense due to the release of foreign tax valuation allowances. Full-year adjusted net income was $1.1 billion ($4.00 per share), up from $906 million ($3.32 per share) in 2015. Per share amounts are diluted.
The company reported 2016 segment operating income of $2.0 billion, down 2 percent from a year ago. The decrease was more than explained by the deconsolidation of Venezuela. Core segment operating income, which excludes Venezuela, was $1.9 billion in 2015.