Goodyear Q3 Tire Sales Fall on Commercial Trucking Weakness
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Goodyear Tire & Rubber Co. posted a loss in the third quarter of 2023 on the back of weak conditions in its truck business, a fire at a Polish factory and an ongoing reorganization, the tire maker said in its quarterly letter to investors.
Akron, Ohio-based Goodyear reported a third-quarter loss of $89 million, or 31 cents per share, compared with a profit of $44 million, or 16 cents per share, in the same period a year earlier. It cited a $153 million jump in reorganization costs as a contributor to the Q3 swing.
Goodyear’s Q3 sales decreased 3.2% to $5.142 billion compared with $5.311 billion the prior year on the back of commercial truck industry weakness and, to a lesser extent, other tire-related sales declines, the company said.
Still, analysts including Deutsche Bank’s Emmanuel Rosner and JPMorgan Chase & Co.’s Ryan Brinkman said the results were better than expected.
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Goodyear sold 45.3 million tires in the most recent quarter, down 2.8% from 46.7 million tires in the year-ago period. In the Americas, sales fell 4.9% year-over-over to 22.9 million tires, a decline of about 1.2 million units. The decline was driven by the impact of increased low-cost imports in Latin America, the continuing effects of an April tornado on its facility in Tupelo, Miss., and commercial truck industry conditions, the company said Nov. 6.
Replacement tire sales in the Americas region fell 5.0% or 1.1 million units year-over-year in Q3, while tires for original equipment slid 4.3% or 100,000 units.
The original equipment sales decrease primarily reflected weaker commercial truck build rates given softer trucking industry conditions, Goodyear said.
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Goodyear’s regional commercial truck replacement tire sales declined 10% year-over-year on continued industry de-stocking, it said, while noting it performed better than its peers amid industrywide declines running at 16%. On the bright side, Goodyear said it expects de-stocking to be largely complete in the fourth quarter.
Globally, Goodyear said its replacement tire sales in Q4 are expected to be 3%-4% lower than in the same period a year earlier, while original equipment sales are expected to be up about 5%.
In the meantime, Goodyear is set to share the recommendations from a strategic and operational review committee on Nov. 15.
