Goodyear Shares Rise 23% Since Q3 Earnings Beat Expectations

Shares of Goodyear Tire GT gained 23% since the company reported third-quarter 2024 results. It 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.

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

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

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.

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.

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