Post Earnings Coverage as Goodyear’s Sales and Earnings Numbers Outperformed Market Estimates

Upcoming AWS Coverage on Cooper Tire & Rubber Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 11, 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 results on April 28, 2017. The largest US tire maker reported a 2.8% increase in adjusted EPS and confirmed its outlook. 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, Cooper Tire & Rubber Co. (NYSE: CTB), reported on April 27, 2017, its Q1 2017 results. AWS will be initiating a research report on Cooper Tire & Rubber in the coming days.

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

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Earnings Reviewed

For the quarter ended March 31, 2017, Goodyear’s sales totaled $3.70 billion, up marginally compared to sales of $3.69 billion in Q1 2016, primarily due to improved price/mix and higher pricing of third-party chemical sales partially offset by lower tire unit volume. The Company’s revenue numbers surpassed analysts’ consensus of $3.69 billion.

For Q1 2017, Goodyear’s Tire unit volumes totaled 40.0 million, down 4% on a y-o-y basis. The Company’s original equipment unit volume declined 8%, primarily driven by lower US auto production in the reported quarter and strong volumes in the US and China during the year earlier comparable quarter. Replacement tire shipments for Q1 2016 were down 2% on a y-o-y basis.

Goodyear reported Q1 2017 segment operating income of $385 million, down from $419 million in Q1 2016, attributed to the impact of lower volume and unabsorbed overhead, which were partially offset by favorable price/mix net of raw material costs and net cost saving actions.

Goodyear’s Q1 2017 net income was $166 million, or $0.65 per share, down compared to net income of $184 million, or $0.68 per share, in Q1 2016. The Company’s adjusted net income for the reported quarter was $189 million, or $0.74 per diluted share, compared to $195 million, or $0.72 per share, in the year earlier same quarter. Goodyear’s earnings exceeded Wall Street’s expectation of $0.72 per share.

Segment Results

For Q1 2017, Goodyear’s Americas’ segment tire unit volume fell 5% on a y-o-y basis to 17.2 million. The division’s sales of $1.96 billion were marginally higher compared to the year ago same period as higher chemical and tire pricing as well as favorable foreign currency translation were partially offset by lower tire unit volume. During Q1 2017, Americas’ segment operating income of $214 million declined 18% on a y-o-y basis, driven by the impact of unabsorbed overhead and lower volume, which was partially offset by favorable price/mix and lower raw material costs.

Goodyear’s Europe, Middle East, and Africa sales decreased 1% to $1.24, reflecting 4% decrease in tire unit volume at 15.5 million and unfavorable foreign currency translation partially offset by improved price/mix. Replacement tire shipments dropped 5%. Europe, Middle East, and Africa’s Q1 2017 segment operating income surged 23% on a y-o-y basis to $98 million due to favorable price/mix net of raw material costs and lower selling, administrative, and general expense partially offset by the impact of lower volume.

During Q1 2017, Goodyear’s Asia/Pacific segment sales increased 3% to $502 million primarily due to improved price/mix. Tire unit volumes were flat at 7.3 million units, while replacement tire shipments were up 7% compared to the year ago corresponding quarter. Asia/Pacific’s segment operating income of $73 million declined 8% on a y-o-y basis as lower income in other tire-related businesses and unfavorable foreign currency translation offset favorable price/mix net of raw materials.

Shareholder Returns

Goodyear paid a quarterly dividend of $0.10 per share of common stock on March 01, 2017. The Company’s Board of Directors has also declared a quarterly dividend of $0.10 per share payable June 01, 2017, to shareholders of record on May 01, 2017. As a part of its previously announced $2.1 billion share repurchase program, Good year repurchased 0.7 million shares of its common stock for $25 million during Q1 2017. Since its inception, the Company has made purchases under the program totaling 31.9 million shares for $938 million.

Outlook

Goodyear confirmed its FY17 segment operating income guidance of approximately $2.0 billion and its 2020 financial targets and capital allocation plan.

Stock Performance

At the closing bell, on Wednesday, May 10, 2017, Goodyear Tire & Rubber’s stock narginally fell 0.20%, ending the trading session at $35.44. A total volume of 1.62 million shares were traded at the end of the day. Shares of the Company have surged 10.61% in the last three months, 26.97% in the past six months, and 26.20% in the previous twelve months. Moreover, the stock rallied 15.49% since the start of the year. The Company’s share has a dividend yield of 1.13% and is trading at a P/E ratio of 7.48.

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