The Goodyear Tire & Rubber Company (NASDAQ:GT) Q3 2018 Earnings Conference Call - Final Transcript

Oct 26, 2018 • 09:00 am ET


The Goodyear Tire & Rubber Company (NASDAQ:GT) Q3 2018 Earnings Conference Call - Final Transcript


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Good morning. My name is Keith and I'll be your conference operator today. At this time I would like to welcome everyone to Goodyear's Third Quarter 2018 Earnings Call. (Operator Instructions) I will now hand the program over to Christina Zamarro Goodyear's Vice President of FP&A and IR. Please go ahead.

Christina Zamarro

Thank you Keith and thank you everyone for joining us for Goodyear's Third Quarter 2018 Earnings Call. I'm joined here today by Rich Kramer Chairman and CEO; and Darren Wells Executive Vice President and CFO. The supporting slide presentation for today's call can be found on our website at and a replay of this call will be available later today. Replay instructions were included in our earnings release issued earlier this morning.

(Forward-Looking Cautionary Statements)

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Our financial results are presented on a GAAP basis and in some cases a non-GAAP basis. The non-GAAP financial measures discussed on our call are reconciled to the US GAAP equivalent as part of the appendix to the slide presentation.

And with that, I'll turn the call over to Rich.

Richard Kramer

Thank you Christina and good morning everyone. Before beginning my remarks I'd like to welcome back Darren Wells who recently rejoined the Company as our CFO. For those of you who are unfamiliar with Darren, during his prior time with Goodyear, he was instrumental in the development of our turnaround strategy during the mid-2000s and was the architect of several of our major capital structure decisions. He also served as a leader of our EMEA operations and helped to bring stability to the business. Throughout his tenure, Darren has experienced several business cycles and can add valuable perspectives as we work our way through the current environment. With his deep knowledge of Goodyear, the tire industry, and his familiarity with many of our analysts and investors, it goes without saying that we're very excited to have Darren back on the team. Welcome Darren.

In the third quarter segment operating income totaled $362 million and segment operating margin was more than 9%. Our global tire shipments increased by 2% on a year-over-year basis driven by the significant gains in the Americas and EMEA. Globally despite significant headwinds in China, we grew both our consumer and commercial volumes led by our consumer replacement and commercial OE businesses.

During the quarter we continued to improve the operating performance in our key mature markets driven by the benefits of strong mix trends and solid volume growth. Our teams delivered outstanding growth in the premium segments of the US and European consumer replacement channels. These gains contributed to improving momentum in our two largest regions as EMEA delivered operating income growth of more than 20% and the Americas turned in its best year-over-year performance since 2016.

We're pleased to see that our total operating performance was relatively stable in a period of increasing volatility.