Goodyear Tire & Rubber Co (GT) Q3 2023 Earnings: Strong Execution Amid Improving Industry ...
Goodyear Tire & Rubber Co (NASDAQ:GT) reported a net loss of $89 million in Q3 2023, compared to a net income of $44 million in the same period last year.
Segment operating income was $336 million, down 9.9% year-over-year.
Overall tire unit volume for the quarter was 45.3 million units, a decrease of 2.8% from the previous year.
Goodyear's total debt at the end of Q3 2023 was $8.7 billion, slightly up from $8.6 billion in Q3 2022.
Released on November 6, 2023, Goodyear Tire & Rubber Co (NASDAQ:GT)'s Q3 2023 earnings report shows a strong execution amid improving industry conditions. Despite facing challenges such as inflation and global tire industry volumes remaining below 2019 levels, the company managed to deliver solid operating results during the third quarter.
Financial Performance
Goodyear reported a net loss of $89 million for Q3 2023, compared to a net income of $44 million in the same period last year. The decrease in net income was primarily due to higher rationalization costs of $153 million, driven by a rationalization and workforce reorganization plan in Europe to improve the company's cost structure. After adjusting for significant items, the company's third quarter net income was $104 million, compared to $116 million in the prior year's quarter.
Segment Operating Income
The company's segment operating income for the quarter was $336 million, down 9.9% year-over-year. The third quarter segment operating income margin was 6.5%, with the company anticipating further gains during the fourth quarter. This was the first quarter in two years where the benefits of price/mix vs. raw materials exceeded inflation.
Tire Unit Volume
Goodyear's tire unit volume for the quarter totaled 45.3 million units, down 2.8% from the previous year. The decline was driven by Americas and EMEA, partly offset by strong growth in premium segments of the U.S. market.
Debt and Cash Flows
At the end of the third quarter, Goodyear's total debt was $8.7 billion, slightly up from $8.6 billion at the same time last year. Net debt was $7.7 billion, compared to $7.4 billion at the end of the third quarter 2022. Cash flows from operating activities for the third quarter were a source of $230 million compared with a use of $94 million in the prior year, driven by improvements in working capital.
Outlook
Despite the challenges, Goodyear remains optimistic about its future. The company continues to focus on the most profitable segments where it can capture the value of its products, brands, and technology in the market. With two out of three of its regions Americas and Asia Pacific delivering SOI margins above 8% during the quarter, Goodyear is well-positioned for further success in the future.
Explore the complete 8-K earnings release (here) from Goodyear Tire & Rubber Co for further details.
This article first appeared on GuruFocus.
