Why Shares in Goodyear Slumped 20% This Week
Shares in Goodyear Tire & Rubber (NASDAQ: GT) were down more than 20% on the week as of the market close on Thursday afternoon. The precipitous move comes after the company missed Wall Street analyst earnings forecasts in its third-quarter earnings released after the market close on Monday. It's yet another disappointment in a year that could have been very different for the company.
Investors started the year looking forward to management enjoying the first full year of the Copper Tire acquisition as it works toward generating cost synergies from the deal. Meanwhile, this was supposed to be the year when car production ramped up, and raw material cost inflation subsided for Goodyear.
Unfortunately, almost everything went wrong. Automakers cut their production expectations on the back of ongoing supply chain constraints exacerbated by the conflict in Ukraine. Raw material inflation continued to surge, and management now expects raw material inflation to peak in Q4 with a $500 million increase to the same period last year and a further $300 million to $400 million increase in the first half of 2023.
Source Fool.com
