Goodyear Rubber & Tire Company ( NASDAQ: GT ) shares declined over 8% in premarket trading, sustaining a slide sparked by a disappointing earnings report on Monday evening.
Aside from rising input costs and understood headwinds in terms of inflation, analysts voiced concern on larger than expected volume declines in the report . Volumes declined 3% year over year with management warning of lower replacement rates, especially in Europe.
“Management’s letter described the global industry trend of lower consumer replacement volume following a period of robust recovery, partly offset by continued industry recovery at OE; but we note that Goodyear’s own volume performance also lagged the industry’s in 3Q,” Deutsche Bank analyst Emmanuel Rosner wrote in a note to clients assessing the print.
He added that despite significant pricing action, operating income came in “well below consensus” as energy and raw material costs remain elevated. Further, the bottom line is expected to remain under pressure into the fourth quarter as EMEA sales lag.
Similarly, Citi analyst Itay Michaeli called out the softer than expected volumes. He also noted that that guidance suggests still-below-consensus operating income into the fourth quarter amid persistent inflationary impacts.
Goodyear ( GT ) stock slid 8.1% shortly before the market open on Tuesday. Though, it is worth noting that the decline in premarket action reflects a significant rebound from a nearly 13% drop marked in the immediate aftermath of the report on Monday evening .
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Goodyear Tire stock sustains slide as analysts scrutinize volume declines