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Goodyear Tire (GT - Free Report) delivered a third-quarter 2023 adjusted earnings per share of 36 cents, surpassing the Zacks Consensus Estimate of 17 cents but decreasing from earnings of 40 cents reported in the year-ago quarter.
The company generated net revenues of $5,142 million, falling 3.2% on a year-over-year basis and missing the Zacks Consensus Estimate of $5,155 million due to a weak commercial truck industry and lower other-tire related sales.
In the reported quarter, tire volume was 45.3 million units, down 2.8% from the year-ago period's levels.
The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise
In the reported quarter, the Americas segment generated revenues of $3,120 million, 5.6% lower than the prior-year period's levels and lagging our estimate of $3,116.3 million due to commercial weakness and lower sales in other-tire related businesses. The segment registered an operating income of $258 million, which decreased 15.7% from the year-ago period's figures. The operating margin was hit by lower volumes. The figure, however, surpassed our expectation of $181.3 million.
Revenues in the Europe, the Middle East and Africa segment were $1,374 million, up 1.2% from the year-ago period's levels, driven by an increase in revenue per tire of 10% and positive foreign currency translation. The figure, however, missed our estimate of $1,451.8 million. The operating income for the segment was $22 million in the quarter, declining 26.7% year over year. The figure, however, surpassed our estimate of an operating income of $14.9 million.
Revenues in the Asia Pacific segment remained flat year over year at $648 million and surpassed our estimate of $604.9 million. The segment’s operating profit was $56 million, up 51.4% from the year-ago figure, owing to the price/mix benefits.
Financial Position
Selling, general & administrative expenses fell to $673 million from $696 million in the year-ago period.
Goodyear had cash and cash equivalents of $1,002 million as of Sep 30, 2023, down from $1,227 million on Dec 31, 2022.
Long-term debt and finance leases amounted to $8,067 million as of Sep 30, 2023, up from $7,267 million on Dec 31, 2022.
Capital expenditure in the quarter was $807 million, up from $765 million in the year-ago quarter.
Revised 2023 Outlook
For 2023, the company now anticipates raw material costs to decrease by $40 million compared with the prior estimate of a rise of $25 million.
Capital expenditures are expected to be $1.05 billion, up from the previous guidance of $1 billion.
The estimates for interest expenses and depreciation and amortization remained unchanged at $540 million and $1 billion, respectively.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings implies year-over-year growth of 10.6% and 29.7%, respectively.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year growth of 6.5% and 55.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 16 cents and 9 cents, respectively, in the past seven days.
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Goodyear (GT) Q3 Earnings Surpass Estimates, Decline Y/Y
Goodyear Tire (GT - Free Report) delivered a third-quarter 2023 adjusted earnings per share of 36 cents, surpassing the Zacks Consensus Estimate of 17 cents but decreasing from earnings of 40 cents reported in the year-ago quarter.
The company generated net revenues of $5,142 million, falling 3.2% on a year-over-year basis and missing the Zacks Consensus Estimate of $5,155 million due to a weak commercial truck industry and lower other-tire related sales.
In the reported quarter, tire volume was 45.3 million units, down 2.8% from the year-ago period's levels.
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
Segmental Performance
In the reported quarter, the Americas segment generated revenues of $3,120 million, 5.6% lower than the prior-year period's levels and lagging our estimate of $3,116.3 million due to commercial weakness and lower sales in other-tire related businesses. The segment registered an operating income of $258 million, which decreased 15.7% from the year-ago period's figures. The operating margin was hit by lower volumes. The figure, however, surpassed our expectation of $181.3 million.
Revenues in the Europe, the Middle East and Africa segment were $1,374 million, up 1.2% from the year-ago period's levels, driven by an increase in revenue per tire of 10% and positive foreign currency translation. The figure, however, missed our estimate of $1,451.8 million. The operating income for the segment was $22 million in the quarter, declining 26.7% year over year. The figure, however, surpassed our estimate of an operating income of $14.9 million.
Revenues in the Asia Pacific segment remained flat year over year at $648 million and surpassed our estimate of $604.9 million. The segment’s operating profit was $56 million, up 51.4% from the year-ago figure, owing to the price/mix benefits.
Financial Position
Selling, general & administrative expenses fell to $673 million from $696 million in the year-ago period.
Goodyear had cash and cash equivalents of $1,002 million as of Sep 30, 2023, down from $1,227 million on Dec 31, 2022.
Long-term debt and finance leases amounted to $8,067 million as of Sep 30, 2023, up from $7,267 million on Dec 31, 2022.
Capital expenditure in the quarter was $807 million, up from $765 million in the year-ago quarter.
Revised 2023 Outlook
For 2023, the company now anticipates raw material costs to decrease by $40 million compared with the prior estimate of a rise of $25 million.
Capital expenditures are expected to be $1.05 billion, up from the previous guidance of $1 billion.
The estimates for interest expenses and depreciation and amortization remained unchanged at $540 million and $1 billion, respectively.
Zacks Rank & Key Picks
GT currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Toyota Motor (TM - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s 2023 sales and earnings implies year-over-year growth of 10.6% and 29.7%, respectively.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year growth of 6.5% and 55.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 16 cents and 9 cents, respectively, in the past seven days.