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Goodyear Tire & Rubber supplies tires for vehicles already on the road and for new vehicles being built. It sells more tires to replacement customers than to vehicle manufacturers, and consumer tires account for the largest share of tire revenue. Its brands include Goodyear, Cooper and Mickey Thompson. Tire sales generate most of its revenue; company-owned stores also earn money from automotive services and related products.
The Americas is its largest business region, with the United States accounting for most of that region’s sales. Demand depends on customers replacing tires and manufacturers building vehicles. What Goodyear earns from those sales also depends on rubber and other material costs and its ability to reflect those costs in tire prices. Its former Beaumont and Houston plants, sold with the chemical business, continue to supply a major portion of its synthetic rubber needs; it buys all its natural rubber on the world market.
Tire safety rules constrain what Goodyear can produce and sell. In the United States, regulators can order recalls of tires with safety defects or those that fail safety standards. U.S. and European tire regulations can also require production changes or the discontinuation of certain tires.
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Goodyear’s results depend chiefly on replacement-tire demand, rubber costs and pricing against global rivals Bridgestone and Michelin, neither of which appears in this list.
LKQ and Goodyear both depend on spending to keep existing vehicles on the road: LKQ distributes maintenance and replacement parts to repair shops, while Goodyear sells mostly replacement tires. Demand for LKQ’s mechanical and maintenance parts offers a read on that shared spending, rather than new-vehicle production.
Lear and Goodyear’s factory-fitted tire business share exposure to global vehicle production: automakers buy Lear’s seats and electrical systems and Goodyear’s tires for new vehicles. Lear’s Seating and E-Systems sales are worth watching for clues to this automaker demand, not Goodyear’s larger replacement-tire business.
Vehicle production drives revenue for both Autoliv and Goodyear’s factory-fitted tires: Autoliv supplies automakers with safety systems such as airbags and seatbelts, while Goodyear supplies tires for new vehicles. Watch Autoliv’s airbag and seatbelt sales for another view of the production demand behind Goodyear’s original-equipment tire sales.
Autoliv, Inc. earningsALV
Autoliv’s report will show how automaker demand for airbags and seatbelts is moving, offering a read on the vehicle production that also drives Goodyear’s factory-fitted tire sales.
Look at Autoliv’s airbag and seatbelt sales. Growth would point to firmer automaker production demand, a supportive backdrop for Goodyear’s factory-fitted tires; weakness would point to a softer production backdrop for those tires, but would not establish Goodyear’s own sales.
Goodyear Tire & Rubber earningsThis company
Goodyear earns most of its revenue from tires, and this report will show whether tire sales and regional operating margins can withstand weaker volume and higher material and production costs.
Read replacement-tire volume alongside operating margins in the Americas, EMEA and Asia Pacific. Rising volume with improving margins would show that price and product mix and savings are outweighing raw-material and production-cost pressures; falling volume with weaker margins would show those pressures still dominate and tire profitability has not stabilized.
