Earnings

Goodyear Tire running flat after lowering 2017 outlook

Key Points
  • Goodyear Tire & Rubber fell sharply Friday after cutting its 2017 outlook to between $1.6 billion and $1.65 billion from $2 billion.
  • The company's chairman and CEO, Richard Kramer, blamed fluctuations in the cost of raw materials and an increasingly competitive environment for its struggles.
A mechanic stacks used tires outside the service bay of a Goodyear Tire & Rubber Co. auto garage in Shelbyville, Kentucky.
Luke Sharrett | Bloomberg | Getty Images

Goodyear Tire & Rubber fell sharply in early trading Friday before recovering slightly in intraday trading.

Down more than 13 percent at one point, the stock recovered modestly and was trading about 10.5 percent below its open in midday trading.

Wall Street was reacting to poor earnings from the largest U.S. tire maker after the company cut its 2017 outlook to between $1.6 billion and $1.65 billion from $2 billion.

Goodyear reported an adjusted net income of $177 million, or 70 cents per share, down from $314 million a year ago. That is in line with economists surveyed by Thomson Reuters.

Tire unit sales in the two largest markets — the Americas and Europe, and the Middle East and Africa — fell 2.9 percent and 11.7 percent, respectively. This helped cause a 10 percent drop in total tire unit sales. Sales in the Asia Pacific market, by far the smallest, increased three percent.

The company's chairman and CEO, Richard Kramer, blamed fluctuations in the cost of raw materials and an increasingly competitive environment for the company's struggles.

On the year, Goodyear is up 3.11 percent, largely thanks to Friday's drop, well below the S&P 500 Index of 10.13 percent.