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Goodyear tanks after profit warning, cites weakening environment in China, India

Key Points
  • Goodyear shares plunged 12 percent after the company announced that fourth-quarter tire unit volumes declined by about 3 percent due to the continued weakening of the environment in China and India.
  • The company also cited reduced demand in the winter tire market in Europe and supply constraints on volume for high-value-added consumer and commercial truck tires in United States as other reasons for this decline.
  • Goodyear's net income is expected to be negatively affected by these factors and the company's total segment operating income is expected to be slightly below previous projections of $1.3 billion as well.
An employee works at a tire store in Hefei, China.
Jie Zhao | Corbis News | Getty Images

Goodyear shares plunged 12 percent after the company announced that fourth-quarter tire unit volumes declined by about 3 percent due to the continued weakening of the environment in China and India.

The company also cited reduced demand in the winter tire market in Europe and supply constraints on volume for high-value-added consumer and commercial truck tires in United States as other reasons for this decline. Earnings also fell in other tire-related businesses including the company's U.S. chemical operations.

Goodyear's net income is expected to be negatively affected by these factors and the company's total segment operating income is expected to be slightly below previous projections of $1.3 billion as well.

Representatives of Goodyear will present these findings at conferences on Jan. 15 and 16 to discuss the company's preliminary performance in 2018. The conferences will be hosted in conjunction with the Detroit Auto Show.

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Key Points
  • China has struggled to enforce its environmental laws as growth-obsessed local governments turn a blind eye to polluting local enterprises, and it has been trying to ensure violations are properly punished.
  • The country prosecuted more than 3,500 people for pollution-related crimes in the first 10 months of the year, up nearly 40 percent on a year ago.
  • The number of criminal prosecutions is still small compared to the nearly 130,000 environmental violations reported in the first nine months of the year, leading to fines of 10.63 billion yuan ($1.53 billion), according to environment ministry data.