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Goodyear (GT) Up 9.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Goodyear (GT - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Goodyear due for a pullback? 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 Q3 Earnings Beat Estimates
Goodyear posted 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -16.42% due to these changes.
VGM Scores
Currently, Goodyear has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. Notably, Goodyear has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Goodyear (GT) Up 9.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Goodyear (GT - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Goodyear due for a pullback? 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 Q3 Earnings Beat Estimates
Goodyear posted 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -16.42% due to these changes.
VGM Scores
Currently, Goodyear has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. Notably, Goodyear has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.