The Goodyear Tire & Rubber Company (GT - Free Report) reported second-quarter 2020 adjusted loss per share of $1.87, narrower than the Zacks Consensus Estimate of a loss of $2.10. Higher-than-expected net sales of tires in America led to lower-than expected loss. Precisely, net sales in America were $1,134 million, surpassing the consensus mark of $798 million.
The bottom line deteriorated from earnings per share of 25 cents recorded in the prior-year quarter due to lower revenues across all segments. Lower industry volume and reduced sales amid the coronavirus pandemic weighed on the firm’s results.
It delivered net revenues of $2,144 million, lower than $3,632 million reported in the year-ago quarter. However, revenues surpassed the Zacks Consensus Estimate of $1,786 million.
For the reported quarter, tire volume was 20.4 million units, down 45% from the year-ago period. Original equipment unit volume decreased 62% due to reduced vehicle production amid factory shutdowns and replacement tire shipments declined 39% from the year-ago quarter owing to lower consumer demand and temporary store closures amid the coronavirus pandemic.
The Americas segment generated revenues of $1,134 million, which compared unfavorably with $1,971 million in the prior-year period. The segment incurred an operating loss of $287 million against income of $134 million in second-quarter 2019. The year-over-year decline was due to reduced volume and weak factory utilization.
Revenues in the Europe, Middle East and Africa segment were $676 million, down from $1,141 million a year ago. The segment’s operating loss was $110 million against operating income of $44 million recorded in the year-ago quarter.
Revenues in the Asia Pacific segment fell 36% year over year to $334 million. The segment incurred operating loss of $34 million for the quarter under review against income of $41 million in the corresponding period of 2019.
Goodyear Tire completed a phased restart of manufacturing facilities in the second quarter. Goodyear had cash and cash equivalents of $1,006 million as of June 2020, up from $908 million as of Dec 31, 2019. As of Mar 31, 2020, long-term debt and finance leases amounted to $5,688 million, up from $4,753 million on Dec 31, 2019.
Zacks Rank & Stocks to Consider
Currently, the company carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space include Garrett Motion Inc , Strattec Security Corporation (STRT - Free Report) and Wabash National Corporation (WNC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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