By Ben Glickman
Goodyear Tire & Rubber, based in Akron, Ohio, experienced a slump in tire volumes, leading to a wider loss in the fourth quarter. This news has caused the company’s shares to drop by 14% in midday trading, currently trading at $11.71, and a total decline of 18% since the beginning of the year.
In the quarter ended December 31, Goodyear’s loss grew to $291 million, or $1.02 per share, compared to a loss of $104 million, or 37 cents per share, in the same period last year. The result fell significantly short of analysts’ expectations, as they were anticipating a profit of 28 cents per share according to FactSet.
Furthermore, the company’s revenue also suffered a decline of 4.8%, failing to meet analysts’ estimates. This decrease was attributed to lower tire and global replacement volumes, as well as higher rationalization charges.
One of the contributing factors to the wider loss in this period was a goodwill impairment charge connected to Goodyear’s Europe, Middle East, and Africa business.
Looking ahead, Goodyear forecasts a 2% decrease in global unit volumes for the first quarter.