Goodyear Tire & Rubber (NYSE:GT) revealed sharper-than-expected declines in third-quarter earnings and sales on Friday and said it anticipates tire unit volume falling next quarter.
The tire maker posted net income of $110 million, or 45 cents a share, compared with a year-earlier profit of $161 million, or 66 cents, below average analyst estimates of 59 cents in a Thomson Reuters poll.
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Revenue for the three months ended Sept. 30 was $5.26 billion, down 13% from $6.06 billion a year ago, widely missing the Street’s view of $5.87 billion.
The sales decline reflected $592 million in lower tier unit volumes and $258 million in negative foreign exchange rates. Tire unit volumes fell 12% to 41.8 million, mostly due to softness in Europe, and the company said it forecasts tire unit volume falling in the range of 3% to 5% year-over-year next quarter.
"While we were impacted by the macroeconomic challenges we face in Europe, we continue to see the benefits of our actions to sustain profit margins in a weak volume environment," Goodyear CEO Richard Kramer said in a statement.
For the full year, Goodyear expects the consumer replacement market to be down between 2% and 3% and commercial replacement down between 6% and 8%, partially offset by gains in both its consumer original equipment and commercial original equipment segments.
Sales declines are expected to be led by Goodyear’s Europe, Middle East and Africa group.