It has been about a month since the last earnings report for Goodyear (GT Quick QuoteGT - Free Report) . Shares have added about 16.4% 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 the most recent earnings report in order to get a better handle on the important drivers.

Goodyear Q3 Earnings Beat Expectations

Goodyear reported third-quarter 2024 adjusted earnings per share (EPS) of 37 cents, surpassing the Zacks Consensus Estimate of 25 cents. The company reported EPS of 36 cents in the year-ago quarter.

The company generated net revenues of $4.82 billion, which declined 6.2% on a year-over-year basis and missed the Zacks Consensus Estimate of $4.98 billion due to lower replacement volume.

In the reported quarter, tire volume was 42.5 million units, down 6.2% from the year-ago period's levels.

Segmental Performance

In the reported quarter, the Americas segment generated revenues of $2.86 billion, which declined 8.4% year over year and missed our estimate of $2.97 billion due to lower replacement volume. The segment registered an operating income of $251 million, which fell 2.7% from the year-ago period's figures. The operating income was hit by lower replacement volume, inflation and unfavorable price/mix and raw material costs. The figure also missed our expectation of $269.5 million.

Revenues in the Europe, Middle East and Africa segment were $1.35 billion, down 1.9% from the year-ago period's levels due to the adverse impact of foreign currency exchange rates and lower replacement volume. The figure also missed our estimate of $1.37 billion. The operating income for the segment was $24 million, which rose 9% on a year-over-year basis due to the Goodyear Forward plan and improved net price/mix compared to raw material costs. The metric also surpassed our expectation of $19.4 million.

Revenues in the Asia Pacific segment fell 4.6% year over year to $618 million due to lower volume and missed our estimate of $681.4 million. The segment’s operating profit was $72 million, up 28.6% from the year-ago quarter’s figure due to the Goodyear Forward plan, improved net price/mix compared to raw material costs and lower net inflationary costs. The figure also topped our estimate of $69.2 million.

Financial Position

Selling, general & administrative expenses fell to $663 million from $673 million in the year-ago period.

Goodyear had cash and cash equivalents of $905 million as of Sept. 30, 2024, up from $902 million as of Dec. 31, 2023.

Long-term debt and finance leases amounted to $7.43 billion as of Sept. 30, 2024, up from $6.83 billion as of Dec. 31, 2023.

Capital expenditure in the first nine months was $912 million, up from $807 million reported in the year-ago quarter.

Revised 2024 Outlook

For full-year 2024, Goodyear now expects capital expenditures to be $1.20 billion, down from the previous estimate of $1.25 billion. It expects interest expenses to be $525 million and depreciation and amortization to be $1 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -9.14% due to these changes.

VGM Scores

At this time, Goodyear has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.