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Goodyear stock falls more than 14% on earnings miss

Yahoo Finance Live anchors discuss the challenging quarter for Goodyear amid ongoing inflation.

Video transcript

[AUDIO LOGO]

JULIE HYMAN: Goodyear Tire & Rubber also reporting third-quarter earnings. Taking a hit from the stronger dollar and the spiking cost of raw materials. And speaking of taking a hit, the shares are down by 15%.

And basically, here coming out and just missing estimates by a pretty wide margin. $0.40 a share is what the company reported. $0.56 is what analysts had anticipated. Sales missing estimates as well.

And the company just having challenges here. And the company commenting on this in the statement saying, "We face many ongoing challenges in the quarter, including persistent inflation. At the same time, new challenges emerged, including a less certain outlook in Europe and the effects of a stronger US dollar."

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BRIAN SOZZI: I tweeted this last night, I'm shocked by now this stock is trading at about a 45% discount to book value. That is just tremendous. Not something you see historically in the market. But not historically you see with a name like a Goodyear in a leadership position in the tire market.

But maybe some simple analysis will help here. It looks like they just pushed through higher prices and their volumes are starting to take a hit. Anecdotally, I was pricing some new tires for my car, over $1,200 for four new tires.

BRAD SMITH: What?

BRIAN SOZZI: That is huge.

JULIE HYMAN: Tires have gone crazy.

BRIAN SOZZI: They have gone crazy. Crazy. Now, you need them but still, do you need--

JULIE HYMAN: Although, I don't--

BRIAN SOZZI: Do you need Goodyears?

JULIE HYMAN: Yeah, I don't know that you--

BRIAN SOZZI: Could you get cheaper tires?

JULIE HYMAN: I'm sure. That seems--

BRIAN SOZZI: It's expensive, though.

JULIE HYMAN: Do you put these same fancy tires on your car that you put the fancy gas in your car that maybe you don't really need?

BRAD SMITH: Is this a low profile?

BRIAN SOZZI: Do you need to ask? I am not getting cheap tires.

BRAD SMITH: Oh, yeah, you're probably going--

BRIAN SOZZI: I'm not getting cheap tires.

BRAD SMITH: You're probably going run-flats, right?

BRIAN SOZZI: Yes, for this car. Yes, run-flats. Yes.