Post Earnings Coverage as Goodyear Surpassed Earnings Expectations

Upcoming AWS Coverage on Carlisle Companies Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 28, 2017 / Active Wall St. announces its post-earnings coverage on The Goodyear Tire & Rubber Co. (NASDAQ: GT). The Company disclosed its first quarter fiscal 2017 financial results on February 07, 2017. The largest US tire maker returned to profit after posting a loss in Q4 2015, which was impacted by the deconsolidation in Company’s Venezuelan business. Register with us now for your free membership at:

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One of Goodyear Tire & Rubber’s competitors within the Rubber & Plastics space, Carlisle Companies Inc. (NYSE: CSL), reported on February 09, 2017, its Q4 and full year 2016 financial results. AWS will be initiating a research report on Carlisle Cos. in the coming days.

Today, AWS is promoting its earnings coverage on GT; touching on CSL. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended December 31, 2016, Goodyear’s sales were $3.7 billion, down compared to $4.1 billion in the year ago same period, driven by the deconsolidation of the Company’s subsidiary in Venezuela. The Company’s sales numbers came in below analysts’ consensus of $3.9 billion.

For Q4 2016, Goodyear’s Tire unit volumes totaled 41.1 million, down 2% from Q4 2015. The Company’s replacement tire shipments were down 1%, while original equipment unit volume declined 7%, driven in part due to weakness in the US commercial truck market.

Goodyear’s Q4 2016 net income was $561 million, or $2.14 per share, compared to a net loss of $380 million, or $1.42 per share, in the year ago comparable quarter. The prior year was negatively impacted by a charge to deconsolidate Venezuela. The Company’s Q4 2016 adjusted net income was $249 million, or $0.95 per diluted share, compared to $257 million, or $0.93 per diluted share, in Q4 2015. The Company’s earnings numbers surpassed market expectations of $0.87 per share.

Goodyear reported Q4 2016 operating income of $479 million compared to $480 million in Q4 2015. Segment’s operating income in 2016 benefited from net cost savings, which was more than offset by lower price/mix net of raw material costs, lower volume, and the deconsolidation of Venezuela. The Company’s Core segment’s operating income, which excludes Venezuela, was $458 million in the year earlier corresponding quarter.

Full-Year Results

Goodyear’s FY16 sales were $15.2 billion, down 8% from FY15, primarily reflecting the deconsolidation of Venezuela and unfavorable foreign currency translation.

The Company’s FY16 Tire unit volumes totaled 166.1 million, essentially unchanged from FY15. Replacement tire shipments were up 2%. Original equipment unit volume was down 4%. Excluding the impact of the deconsolidation of Venezuela, unit volumes increased 1%.

Goodyear’s FY16 net income of $1.3 billion, or $4.74 per share, increased compared to $307 million, or $1.12 per share, in FY15. The increase was driven by a charge in FY15 to deconsolidate Venezuela and a decrease in FY16 income tax expense due to the release of foreign tax valuation allowances. The Company’s FY16 adjusted net income was $1.1 billion, or $4.00 per diluted share, up from $906 million, or $3.32 diluted per share, in FY15.

Goodyear generated segment’s operating income of $2.0 billion in FY16, down 2% from a year ago. The decrease was more than explained by the deconsolidation of Venezuela. Core segment’s operating income, which excludes Venezuela, was $1.9 billion in FY15.

Cash Flow & Balance Sheet

For Q4 2016, Goodyear’s cash and cash equivalents at the end of the quarter were about $1.1 billion. The Company’s net debt was down more than $700 million from Q3 2016. Goodyear’s global pension unfunded liability at the end of the year was $669 million up slightly from the prior year. Goodyear generated $1 billion in free cash flow from operations, driven by an $833 million working capital benefit. Additionally, cash flow from operating activities was $1.3 billion in Q4 2016 and $1.5 billion for FY16.

Goodyear repurchased $300 million worth of its common stock during Q4 2016, or about 10 million shares. For FY16, the Company repurchased $500 million in common stock, or 16.7 million shares. In addition, Goodyear repaid $200 million on its US second lien term loan in December, taking the remaining balance to $400 million.

Stock Performance

At the closing bell, on Monday, February 27, 2017, Goodyear Tire & Rubber’s stock marginally declined 0.28%, ending the trading session at $35.26. A total volume of 2.56 million shares were traded at the end of the day. In the last month and previous three months, shares of the Company have surged 11.55% and 14.40%, respectively. Moreover, the stock rallied 14.59% since the start of the year. The stock is trading at a PE ratio of 7.40 and has a dividend yield of 0.96%.

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