We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Goodyear (GT) Down 2.2% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Goodyear (GT - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Goodyear due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Goodyear Posts Wider Than Expected Q2 Loss
Goodyear delivered a second-quarter 2023 adjusted loss per share of 34 cents, wider than the Zacks Consensus Estimate of 15 cents, which decreased from earnings of 46 cents per share reported in the year-ago quarter.
The company generated net revenues of $4,867 million, falling 6.6% on a year-over-year basis and missing the Zacks Consensus Estimate of $5,194 million due to lower volume and the adverse impacts of foreign exchange.
In the reported quarter, tire volume was 40.8 million units, down 10.7% from the year-ago period.
Segmental Performance
In the reported quarter, the Americas segment generated revenues of $2,939 million, around 6.6% lower than the prior-year period and lagged our estimate of $3,337.3 million due to a 10.9% decline in tire volume. The segment registered an operating income of $103 million, which decreased 64.8% from the year-ago period. The operating margin was hit by lower volumes. The figure missed our expectation of $191 million.
Revenues in the Europe, the Middle East and Africa (EMEA) segment were $1,341 million, down 10.4% from the year-ago period. The figure missed our estimate of $1,385 million due to lower unit volumes. The operating loss for the segment was $19 million in the quarter, declining 136.5%. The figure also missed our estimate of an operating income of $16.9 million.
Revenues in the Asia Pacific segment increased 3.3% year over year to $587 million but lagged our estimate of $589.2 million. The segment’s operating profit was $40 million, up 110.5% from the year-ago figure, owing to the price/mix benefits.
Financial Position
Selling, general & administrative expenses fell to $708 million from $717 million in the year-ago period.
Goodyear had cash and cash equivalents of $1,049 million as of Jun 30, 2023, down from $1,227 million on Dec 31, 2022. Long-term debt and finance leases amounted to $8,027 million, up from $7,267 million on Dec 31, 2022. Capital expenditure in the quarter was $245 million, up from $235 million in the year-ago quarter.
Revised 2023 Outlook
For 2023, the company anticipates raw material costs to rise $25 million, contracting from the prior mentioned $100 million. Capital expenditure are expected to be $1 billion. Interest expenses and depreciation and amortization are expected to be $540 million and $1 billion, up from the prior estimation of $500 million and $950 million, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -49.62% due to these changes.
VGM Scores
Currently, Goodyear has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Goodyear has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Goodyear (GT) Down 2.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Goodyear (GT - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Goodyear due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Goodyear Posts Wider Than Expected Q2 Loss
Goodyear delivered a second-quarter 2023 adjusted loss per share of 34 cents, wider than the Zacks Consensus Estimate of 15 cents, which decreased from earnings of 46 cents per share reported in the year-ago quarter.
The company generated net revenues of $4,867 million, falling 6.6% on a year-over-year basis and missing the Zacks Consensus Estimate of $5,194 million due to lower volume and the adverse impacts of foreign exchange.
In the reported quarter, tire volume was 40.8 million units, down 10.7% from the year-ago period.
Segmental Performance
In the reported quarter, the Americas segment generated revenues of $2,939 million, around 6.6% lower than the prior-year period and lagged our estimate of $3,337.3 million due to a 10.9% decline in tire volume. The segment registered an operating income of $103 million, which decreased 64.8% from the year-ago period. The operating margin was hit by lower volumes. The figure missed our expectation of $191 million.
Revenues in the Europe, the Middle East and Africa (EMEA) segment were $1,341 million, down 10.4% from the year-ago period. The figure missed our estimate of $1,385 million due to lower unit volumes. The operating loss for the segment was $19 million in the quarter, declining 136.5%. The figure also missed our estimate of an operating income of $16.9 million.
Revenues in the Asia Pacific segment increased 3.3% year over year to $587 million but lagged our estimate of $589.2 million. The segment’s operating profit was $40 million, up 110.5% from the year-ago figure, owing to the price/mix benefits.
Financial Position
Selling, general & administrative expenses fell to $708 million from $717 million in the year-ago period.
Goodyear had cash and cash equivalents of $1,049 million as of Jun 30, 2023, down from $1,227 million on Dec 31, 2022. Long-term debt and finance leases amounted to $8,027 million, up from $7,267 million on Dec 31, 2022. Capital expenditure in the quarter was $245 million, up from $235 million in the year-ago quarter.
Revised 2023 Outlook
For 2023, the company anticipates raw material costs to rise $25 million, contracting from the prior mentioned $100 million. Capital expenditure are expected to be $1 billion. Interest expenses and depreciation and amortization are expected to be $540 million and $1 billion, up from the prior estimation of $500 million and $950 million, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -49.62% due to these changes.
VGM Scores
Currently, Goodyear has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Goodyear has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.