Weaker Truck Sector Tire Demand Induces Q2 Loss at Goodyear

Weaker Truck Sector Tire Demand Induces Q2 Loss at Goodyear

A Goodyear plant in Thailand. (Goodyear Tire & Rubber Co.)

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Weaker demand from the U.S. and European industrial truck sectors resulted in a second-quarter 2023 loss at Goodyear Tire & Rubber Co., it stated, whereas additionally citing a twister shuttering manufacturing at a Mississippi plant as an element.

Akron, Ohio-based Goodyear reported a lack of $208 million, or 73 cents per diluted share, within the three months that ended June 30, in contrast with a revenue of $166 million, 58 cents, in the identical interval a yr earlier, it stated in an Aug. 2 letter to traders.

The corporate’s income totaled $4.867 billion within the second quarter, in contrast with $5.212 billion within the year-ago interval.

Goodyear offered 4.8 million or 10.7% fewer tires globally in the latest quarter at 40.8 million tires, in contrast with 45.6 million within the year-ago interval. The corporate noticed a ten.9% or 2.5 million-tire lower in its second-quarter gross sales within the Americas to twenty.8 million tires from 23.3 million models a yr earlier.

A Goodyear service heart in Akron, Ohio. (Goodyear Tire & Rubber Co.)

Heading into the latest quarter, Goodyear anticipated an enchancment in earnings; nevertheless, softer client and industrial truck markets, notably within the Western world, sank these prognostications, it stated.

Goodyear Chairman and CEO Richard Kramer stated within the letter {that a} lower in freight ton miles and utilization drove industrial tire alternative destocking.

The weak spot in demand from the industrial truck trade damage Goodyear earnings to the tune of $60 million, it stated.

For context, the influence of the storm-damaged Tupelo, Miss., plant shutting for a part of April, all of Might and a part of June on working earnings was estimated at $50 million. The ability’s absence lower Goodyear tire manufacturing by about 1 million models, it stated.

Gross sales to the industrial car alternative sector within the Americas fell 21% year-over-year in the latest quarter, with Goodyear noting it was a big worsening of a development seen within the first quarter of 2023.

Goodyear Chief Monetary Officer Christina Zamarro stated through the firm’s analyst earnings name Aug. 3 that the industrial sector was usually extra unstable than different areas, however a stoop in freight charges led to main headwinds for the corporate. Zamarro stated spot freight charges fell 25% year-over-year in June, with out offering extra specifics on the geography she was referring to.

Zamarro stated the freight price degree led to rapid destocking, and Goodyear’s industrial truck tire gross sales volumes fell by 600,000 consequently, including that the development will proceed into the third quarter, however the influence is not going to be as extreme. The influence is prone to be 200,000-300,000 tire gross sales within the third quarter, she stated.

Goodyear is extra optimistic concerning the outlook for the third quarter.

The third quarter is predicted to be the primary of 2023 the place the web impact of value/combine, uncooked materials prices and inflation will likely be constructive, it stated. Industrial tire alternative will proceed to be affected by continued destocking within the third quarter, however the influence will likely be much less extreme than within the second quarter, it added.

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