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Goodyear Rolls Out Earnings Report

Goodyear Tire & Rubber Company (GT) released its third quarter report on Monday, November 6. The multinational tire manufacturer's shares rose 3% despite reporting lower sales and revenue.

The company reported net sales of $5.14 billion during the quarter, missing analysts' expectations of $5.28 billion. This was down 3% from $5.31 billion in sales during the same quarter last year.

"Strong execution amid improving industry conditions enabled us to deliver solid operating results during the third quarter," said Goodyear CEO, Rich Kramer in a letter to shareholders. "Our products have never been stronger and our positioning in the marketplace has never been better. While we expect margin growth again in the fourth quarter, we see significant room for improvement in SOI margin as we move ahead."

Goodyear reported a net loss of $89.0 million for the quarter or $0.31 per adjusted share. This is down from net income of $44.0 million or $0.16 per adjusted share in the same quarter last year.

The Akron, Ohio-based company saw a 3.2% decrease in sales year-over-year, driven by the impact of commercial truck industry weakness and lower other-tire related sales. Goodyear's Tire unit volume decreased 2.8% to 45.3 million units compared to 46.7 million units last year. Global replacement volume within the Tire segment decreased 5.3%, which was attributed to increased low-cost imports in Latin America and continuing effects of the tornado near its Mississippi facility but was partly offset by strong growth in premium segments of the U.S. market. Goodyear recently announced the completion of its largest solar panel installation at its manufacturing plant in Dalian, China, which is estimated to reduce carbon emissions by 17,000 metric tons per year over 25 years.

Goodyear Tire and Rubber Company (GT) shares ended the week at $12.85, up 2% for the week.

Hilton Grand Vacations Announces Quarterly Earnings

Hilton Grand Vacations, Inc. (HGV) released its third quarter earnings on Monday, November 6. The Orlando-based timeshare and vacation club company's revenue fell short, causing shares to drop more than 8% following the release of the report.

The company's revenue for the first quarter was $1.02 billion. This was down 9% from $1.12 billion during the same quarter last year and below analysts' forecast of $1.05 billion.

"I am proud of the team's resilience as we navigated several unique challenges this quarter, including the devastating wildfires in Maui and a modestly softer consumer macroeconomic environment," said Hilton Grand Vacations CEO, Mark Wang. "We remain confident in our long-term strategy of driving tour flow and net owner growth to embed future value into the business and generate sustainable free cash flow."

Hilton Grand reported net income of $92.0 million during the quarter or $0.83 per adjusted share. This was down from net income of $150.0 million or $1.24 per share last year at this time.

Hilton Grand Vacations saw an increase in revenue across most major segments. The company's Real Estate Sales and Financing revenues decreased 18% to $612 million from $745 million this time last year. Financing revenues increased 10% to $75 million in the third quarter of 2023 and Resort Operations and Club Management revenue increased 8% to $322 million from $299 million. Hilton Grand Vacations recently announced the acquisition of Bluegreen Resorts along with a 10-year exclusive marketing and joint venture agreement with the sporting goods retailer, Bass Pro Shops.

Hilton Grand Vacations, Inc. (HGV) shares ended the week at $33.63, down 4% for the week.

Rivian Drives Up Earnings

Rivian Automotive Inc. (RIVN) posted its third quarter earnings report on Tuesday, November 7. The electric automotive company reported better-than-expected quarterly results, causing its stock to rise 4% following the release of the report.

Rivian reported revenue of $1.34 billion for the quarter, up from the $536 million reported during the same quarter last year. Quarterly revenue exceeded analysts' expectations of $1.32 billion.

"Results for the third quarter of 2023 reflect continued progress against our key value drivers including ramping production, improving cost efficiency, successfully introducing new technologies, and enhancing the customer experience," said Rivian in a letter to shareholders. "Importantly, investment in new technologies and our direct-to-customer operations are contributing to Rivian's competitive differentiation by enhancing the features and capabilities of our consumer and commercial platforms as well as improving the customer experience."

The company posted net losses of $1.37 million or $1.44 per adjusted share for the quarter. This was an improvement compared to net losses of $1.72 million or $1.88 per adjusted share during the same quarter last year.

The California-based electric vehicle manufacturer announced that it produced 16,304 EVs and delivered 15,564 vehicles during the third quarter. Rivian recently revealed its plan to allow other businesses to acquire its specially designed Rivian Commercial Van (RCV), providing these companies with opportunities to transition their delivery fleets to electric power and reduce CO2 emissions. Amazon and Rivian remain committed to introducing 100,000 Rivian electric delivery vehicles (EDVs) as an initiative projected to reduce Amazon's carbon footprint by millions of metric tons annually. The company updated its full-year production guidance and plans to produce 54,000 vehicles by the end of 2023.

Rivian Automotive Inc. (RIVN) shares ended the week at $15.40, down 15% for the week.

The Dow started the week of 11/6 at 34,093 and closed at 34,283. The S&P 500 started the week at 4,364 and closed at 4,415. The NASDAQ started the week at 13,514 and closed at 13,798.

Treasury Yields Fall

Treasury Yields fell at the beginning of the week as investors evaluated the U.S. economy and assessed economic data and monetary policy. Yields continued to drop at the end of the week after the Treasury's $40 billion auction of 10-year notes reaffirmed buying interest in government debt.

On Thursday, Federal Reserve Chair Jerome Powell spoke at the International Monetary Fund meeting in Washington D.C. At the meeting, Powell indicated that while the Federal Reserve had no immediate plans to raise its benchmark interest rate further, with data suggesting that inflation pressures are gradually diminishing, the Fed will not hesitate to increase rates if needed.

"U.S. inflation has come down over the past year but remains well above our 2% target," said Federal Reserve Chairman, Jerome Powell. "We know that ongoing progress toward our 2% goal is not assured: Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further, we will not hesitate to do so."

The benchmark 10-year Treasury note yield opened the week of November 6 at 4.52% and traded as low as 4.49% on Wednesday. The 30-year Treasury bond opened the week at 4.70% and traded as low as 4.40% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 3,000 to 217,000 for the week ending November 4. This was below economists' estimates of 220,000. Continuing claims increased by 22,000 to 1.83 million, the highest level in seven months.

"Initial claims still support a jobs market typical of an expansion," said corporate economist at Navy Federal Credit Union, Robert Frick. "Average weekly claims this year are about 227,000, and given the booming third quarter GDP, claims are unlikely to rise much this year."

The 10-year Treasury note yield finished the week of 11/6 at 4.65%, while the 30-year Treasury note yield finished the week at 4.76%.

Mortgage Rates Decline

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, November 9. The survey showed 30-year mortgage rates dropped off as U.S. Treasury Yields lower.

This week, the 30-year fixed rate mortgage averaged 7.50%, down from last week's average of 7.76%. Last year at this time, the 30-year fixed rate mortgage averaged 7.08%.

The 15-year fixed rate mortgage averaged 6.81% this week, down from last week's 7.03%. During the same week last year, the 15-year fixed rate mortgage averaged 6.38%.

"As Treasury yields decline, the 30-year fixed-rate mortgage dropped a quarter of a percent, the largest one-week decrease since last November," said Freddie Mac's Chief Economist, Sam Khater. "Incoming data show that household debt continues to rise, primarily due to mortgage, credit card and student loan balances. Many consumers are feeling strained by the high cost of living, so unless mortgage rates decrease significantly, the housing market will remain stagnant."

Based on published national averages, the savings rate was 0.46% as of 10/16. The one-year CD averaged 1.79%.

Editor's Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.

Published November 10, 2023

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