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Goodyear (GT) Earnings Miss Estimate in Q2, Decline Y/Y

Zacks Equity Research

The Goodyear Tire & Rubber Company GT has reported adjusted earnings per share of 25 cents in second-quarter 2019 compared with 62 cents in the prior-year quarter. Further, its earnings missed the Zack Consensus Estimate of 31 cents. It reported net income of $54 million, down from the net income of $157 million in the year-ago quarter.

The company delivered net revenues of $3.63 billion, lower than $3.84 billion in the year-ago quarter. Also, its revenues missed the Zacks Consensus Estimate of $3.66 billion. The year-over-year decline in revenues was due to currency fluctuations as well as lower volume and sales from other tire-related businesses. These were partly offset by improvements in price/mix.

In the reported quarter, tire volume was 37.4 million units, down 4% from the year-ago quarter. Replacement tire shipments declined less than 1% from the year-ago quarter.

Segment operating income was $219 million, down from $324 million a year ago.

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 price-consensus-eps-surprise-chart | The Goodyear Tire & Rubber Company Quote

Segments in Detail

Revenues in the Americas segment declined year over year from $2.01 billion to $1.97 billion. The segment’s operating income was $134 million, down from $154 million in second-quarter 2018.

Revenues at the Europe, Middle East and Africa segment were $1.14 billion, down 9% year over year. The segment’s operating income decreased 56% to $44 million.

Revenues at the Asia Pacific segment declined 8% to $520 million. The segment’s operating income declined year over year to $41 million from $70 million.

Financial Position

Goodyear had cash and cash equivalents of $917 million as of Jun 30, 2019, up from $801 million as of Dec 31, 2018. As of Jun 30, 2019, long-term debt and finance leases amounted to $5.77 billion, up from $5.11 billion as of Dec 31, 2018.

Zacks Rank & Stocks to Consider

Currently, Goodyear carries a Zacks Rank#3 (Hold).

Some better-ranked stocks in the auto space are Copart, Inc. CPRT, CarMax, Inc. KMX and Advance Auto Parts, Inc. AAP. While Copart currently sports a Zacks Rank #1 (Strong Buy), CarMax and Advance Auto Parts has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have shot up 39%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have rallied 19.4%.

Advance Auto Parts has an expected long-term growth rate of 11.6%. In the past year, shares of the company have improved 7.3%.

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