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Sep 30, 2023
Goodyear Q3 2023 Earnings Report
Goodyear delivered solid operating results driven by strong execution amid improving industry conditions.
Key Takeaways
Goodyear's Q3 2023 results showed a net loss of $89 million, or $0.31 per share, compared to a net income of $44 million, or $0.16 per share, in the prior year. Adjusted EPS was $0.36 compared to $0.40 a year ago. Net sales decreased by 3.2% to $5.142 billion. The segment operating income was $336 million with a margin of 6.5%.
Third quarter segment operating income margin was 6.5%.
Benefits of price/mix vs. raw materials exceeded inflation.
Asia Pacific segment continued to generate momentum, benefitting from a focus on growing in premium segments of the markets.
Continued to strengthen premium tire lineup in targeted market segments, evident in a host of new product launches during the quarter.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Fourth quarter results are expected to be negatively impacted by a fire in our factory in Poland (~$20 million discrete impact). Despite this development, we expect our fourth quarter volume to be the highest of any quarter this year and we continue to expect sequential margin expansion, reflecting strong price / mix benefits from our strategic focus on more premium, high-value segments of the market.
Positive Outlook
- OE volumes are expected to be up approximately 5%.
- We expect raw material costs to be lower than prior year by approximately $300 million.
- We expect the net benefit of price/mix vs raw materials to be approximately $250 million.
- Fourth quarter free cash flow is expected to be a significant source of cash, in line with historical seasonality.
- Commercial replacement industry expected to be flat to down slightly, with destocking trends easing.
Challenges Ahead
- Global replacement unit volumes are expected to be 3 to 4% lower than prior year levels.
- Lower production in the third quarter (4.4 million units below the third quarter 2022), excluding the impact of the Debica fire, will negatively impact fourth quarter unabsorbed overhead by approximately $40 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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