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Goodyear (GT) Q4 Earnings & Sales Top Estimates, Profit Up Y/Y
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The Goodyear Tire & Rubber Company (GT - Free Report) reported fourth-quarter 2020 adjusted earnings per share of 44 cents, surpassing the Zacks Consensus Estimate of 16 cents. Higher-than-expected operating income from the Americas & Europe, Middle East and Africa (EMEA) units led to this outperformance. Precisely, operating income from the said segments came $190 million and $69 million, respectively, outpacing the consensus mark of $125 million and $19 million respectively.
Also, the bottom line compares favorably with the earnings per share of 19 cents recorded in the prior-year quarter.
The company registered net revenues of $3,656 million, lower than the $3,713 million reported in the year-ago quarter due to reduced volumes and unfavorable currency translations. However, revenues beat the Zacks Consensus Estimate of $3,592 million.
For the reported quarter, tire volume was 37.7 million units, down 5% from the year-ago period. Replacement tire shipments declined 7% year on year, reflecting the impact of reduced consumer demand. Original equipment unit volume increased 3% year on year on increased market share in the Americas and EMEA segments.
The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise
For the reported quarter, the Americas segment generated revenues of $1,926 million, which compares unfavorably with the prior-year period’s $2,026 million. This was due to lower volume and unfavorable foreign-currency translation. The reported figure also missed the Zacks Consensus Estimate of 1,939 million. Nonetheless, the segment registered an operating income of $190 million, higher than the $152 million reported in fourth-quarter 2019. This upswing reflects the benefits of cost-saving actions, lower raw material costs, a one-time benefit related to a legal settlement and improvements in product mix.
Revenues in the Europe, Middle East and Africa segment were $1,193 million, up from the prior year’s $1,141 million. The reported figure also exceeded the Zacks Consensus Estimate of $1,114 million. The segment’s operating profit increased to $69 million during the quarter, up from the $38 million witnessed in the prior quarter, driven by the impact of lower raw material costs, improvements in product mix and the benefits of cost-saving actions.
Revenues in the Asia Pacific segment declined 2% year over year to $537 million. The reported figure, however, topped the consensus mark of $520 million. The segment’s operating profit came in at $43 million for the quarter, lower than the $52 million recorded in the corresponding period of 2019.
Goodyear — peers of which include Cooper Tire & Rubber Company , Bridgestone Corp. (BRDCY - Free Report) and Michelin (MGDDY - Free Report) — had cash and cash equivalents of $1,539 million as of Dec 31, 2020, up from $908 million on Dec 31, 2019. As of Dec 31, 2020, long-term debt and finance leases amounted to $5,432 million, up from $4,753 million on Dec 31, 2019. Cash flow from operating activities as of Dec 31, 2020 summed $1,115 million, up from $1,207 million on Dec 31, 2019.
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Goodyear (GT) Q4 Earnings & Sales Top Estimates, Profit Up Y/Y
The Goodyear Tire & Rubber Company (GT - Free Report) reported fourth-quarter 2020 adjusted earnings per share of 44 cents, surpassing the Zacks Consensus Estimate of 16 cents. Higher-than-expected operating income from the Americas & Europe, Middle East and Africa (EMEA) units led to this outperformance. Precisely, operating income from the said segments came $190 million and $69 million, respectively, outpacing the consensus mark of $125 million and $19 million respectively.
Also, the bottom line compares favorably with the earnings per share of 19 cents recorded in the prior-year quarter.
The company registered net revenues of $3,656 million, lower than the $3,713 million reported in the year-ago quarter due to reduced volumes and unfavorable currency translations. However, revenues beat the Zacks Consensus Estimate of $3,592 million.
For the reported quarter, tire volume was 37.7 million units, down 5% from the year-ago period. Replacement tire shipments declined 7% year on year, reflecting the impact of reduced consumer demand. Original equipment unit volume increased 3% year on year on increased market share in the Americas and EMEA segments.
The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise
The Goodyear Tire & Rubber Company price-consensus-eps-surprise-chart | The Goodyear Tire & Rubber Company Quote
Key Takeaways
For the reported quarter, the Americas segment generated revenues of $1,926 million, which compares unfavorably with the prior-year period’s $2,026 million. This was due to lower volume and unfavorable foreign-currency translation. The reported figure also missed the Zacks Consensus Estimate of 1,939 million. Nonetheless, the segment registered an operating income of $190 million, higher than the $152 million reported in fourth-quarter 2019. This upswing reflects the benefits of cost-saving actions, lower raw material costs, a one-time benefit related to a legal settlement and improvements in product mix.
Revenues in the Europe, Middle East and Africa segment were $1,193 million, up from the prior year’s $1,141 million. The reported figure also exceeded the Zacks Consensus Estimate of $1,114 million. The segment’s operating profit increased to $69 million during the quarter, up from the $38 million witnessed in the prior quarter, driven by the impact of lower raw material costs, improvements in product mix and the benefits of cost-saving actions.
Revenues in the Asia Pacific segment declined 2% year over year to $537 million. The reported figure, however, topped the consensus mark of $520 million. The segment’s operating profit came in at $43 million for the quarter, lower than the $52 million recorded in the corresponding period of 2019.
Goodyear — peers of which include Cooper Tire & Rubber Company , Bridgestone Corp. (BRDCY - Free Report) and Michelin (MGDDY - Free Report) — had cash and cash equivalents of $1,539 million as of Dec 31, 2020, up from $908 million on Dec 31, 2019. As of Dec 31, 2020, long-term debt and finance leases amounted to $5,432 million, up from $4,753 million on Dec 31, 2019. Cash flow from operating activities as of Dec 31, 2020 summed $1,115 million, up from $1,207 million on Dec 31, 2019.
Currently, Goodyear carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>