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Goodyear's (GT) Q1 Earnings Beat, Down Y/Y, Revenues Up
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The Goodyear Tire & Rubber Company (GT - Free Report) reported adjusted earnings per share of 50 cents in comparison with 74 cents in the prior-year quarter. However, the bottom line surpassed the Zack Consensus Estimate of 44 cents. The company reported net income of $75 million, down from $166 million in first-quarter 2017.
Goodyear reported net revenues of $3.83 billion, higher than $3.70 billion recorded in the year-ago quarter. Also, the figure surpassed the Zacks Consensus Estimate of $3.81 billion.
During the quarter under concern, tire unit volumes were 39 million, down 2.5% from first-quarter 2017. Replacement tire shipments declined 2% while original equipment unit volume slipped 4% in comparison with the prior-year quarter.
Segment operating income dropped to $281 million in the reported quarter from $390 million a year ago.
Segment Details
Revenues at the Americas’ segment declined 2% year over year to $1.9 billion, reflecting a decline in unit volume. Driven by higher raw material costs and lower price/mix, segment operating income plunged 41% to $127 million.
Revenues from Europe, Middle East and Africa segment were $1.3 billion, up 7% year over year. This upside was driven by an improved price mix and a favorable foreign currency translation. The segment’s operating income decreased 23% to $78 million. This was due to high raw material costs, which was more than offset by improvements in price/mix and lower volume.
Revenues from the Asia-Pacific segment grew 14% to $571 million, reflecting an improved price mix, favorable foreign currency translation and higher tire volumes. The segment’s operating income rose 4% to $76 million, from $103 million a year ago. This rise is driven by a higher volume and reduced conversion costs.
Financial Position
Goodyear had cash and cash equivalents of $837 million as of Mar 31, 2018, down from $1.04 billion as of Dec 31, 2017. Long-term debt and capital leases amounted to $5.6 billion as of Mar 31, 2018, up from $5.08 billion as of Dec 31, 2017.
On Mar 31, 2018, the company recorded total cash flow of $389 million from operating activities in comparison with $286 million, recorded at the end of comparable quarter last year. Also, capital expenditure for the period decreased to $248 million from $271 million a year ago.
Capital Deployment
During the reported quarter, Goodyear repurchased around 875 thousand shares for $25 million, under the previously announced $2.1 billion share repurchase program.
Since the share repurchase program in 2013, Goodyear repurchased total 45 million shares for $1.3 billion.
Outlook
Goodyear reaffirms its 2018 operating income guidance and expects it to be between $1.8 billion and $1.9 billion.
The company also confirmed its 2020 segment operating income target of $2 to $2.4 billion.
Zacks Rank & Key Picks
Goodyear carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Fox Factory Holding Corp. (FOXF - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) , each carrying a Zacks Rank #2 (Buy).
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
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Goodyear's (GT) Q1 Earnings Beat, Down Y/Y, Revenues Up
The Goodyear Tire & Rubber Company (GT - Free Report) reported adjusted earnings per share of 50 cents in comparison with 74 cents in the prior-year quarter. However, the bottom line surpassed the Zack Consensus Estimate of 44 cents. The company reported net income of $75 million, down from $166 million in first-quarter 2017.
Goodyear reported net revenues of $3.83 billion, higher than $3.70 billion recorded in the year-ago quarter. Also, the figure surpassed the Zacks Consensus Estimate of $3.81 billion.
During the quarter under concern, tire unit volumes were 39 million, down 2.5% from first-quarter 2017. Replacement tire shipments declined 2% while original equipment unit volume slipped 4% in comparison with the prior-year quarter.
Segment operating income dropped to $281 million in the reported quarter from $390 million a year ago.
Segment Details
Revenues at the Americas’ segment declined 2% year over year to $1.9 billion, reflecting a decline in unit volume. Driven by higher raw material costs and lower price/mix, segment operating income plunged 41% to $127 million.
Revenues from Europe, Middle East and Africa segment were $1.3 billion, up 7% year over year. This upside was driven by an improved price mix and a favorable foreign currency translation. The segment’s operating income decreased 23% to $78 million. This was due to high raw material costs, which was more than offset by improvements in price/mix and lower volume.
Revenues from the Asia-Pacific segment grew 14% to $571 million, reflecting an improved price mix, favorable foreign currency translation and higher tire volumes. The segment’s operating income rose 4% to $76 million, from $103 million a year ago. This rise is driven by a higher volume and reduced conversion costs.
Financial Position
Goodyear had cash and cash equivalents of $837 million as of Mar 31, 2018, down from $1.04 billion as of Dec 31, 2017. Long-term debt and capital leases amounted to $5.6 billion as of Mar 31, 2018, up from $5.08 billion as of Dec 31, 2017.
On Mar 31, 2018, the company recorded total cash flow of $389 million from operating activities in comparison with $286 million, recorded at the end of comparable quarter last year. Also, capital expenditure for the period decreased to $248 million from $271 million a year ago.
Capital Deployment
During the reported quarter, Goodyear repurchased around 875 thousand shares for $25 million, under the previously announced $2.1 billion share repurchase program.
Since the share repurchase program in 2013, Goodyear repurchased total 45 million shares for $1.3 billion.
Outlook
Goodyear reaffirms its 2018 operating income guidance and expects it to be between $1.8 billion and $1.9 billion.
The company also confirmed its 2020 segment operating income target of $2 to $2.4 billion.
Zacks Rank & Key Picks
Goodyear carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Fox Factory Holding Corp. (FOXF - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) , each carrying a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.
Fox Factory Holding has an expected long-term growth rate of 10.5%. In the past year, shares of the company have returned 15.8%.
Allison Transmission has an expected long-term growth rate of 10%. In a year, shares of the company have advanced 3.9%.
Honda has an expected long-term growth rate of 4.8%. In a year’s time, shares of the company have returned 17.5%.
The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise
The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise | The Goodyear Tire & Rubber Company Quote
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>