The Goodyear Tire & Rubber Company GT reported fourth-quarter 2020 adjusted earnings per share of 44 cents, surpassing the Zacks Consensus Estimate of 16 cents. Higher-than-expected operating income from the Americas & Europe, Middle East and Africa (EMEA) units led to this outperformance. Precisely, operating income from the said segments came $190 million and $69 million, respectively, outpacing the consensus mark of $125 million and $19 million respectively.
Also, the bottom line compares favorably with the earnings per share of 19 cents recorded in the prior-year quarter.
The company registered net revenues of $3,656 million, lower than the $3,713 million reported in the year-ago quarter due to reduced volumes and unfavorable currency translations. However, revenues beat the Zacks Consensus Estimate of $3,592 million.
For the reported quarter, tire volume was 37.7 million units, down 5% from the year-ago period. Replacement tire shipments declined 7% year on year, reflecting the impact of reduced consumer demand. Original equipment unit volume increased 3% year on year on increased market share in the Americas and EMEA segments.
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
Key Takeaways
For the reported quarter, the Americas segment generated revenues of $1,926 million, which compares unfavorably with the prior-year period’s $2,026 million. This was due to lower volume and unfavorable foreign-currency translation. The reported figure also missed the Zacks Consensus Estimate of 1,939 million. Nonetheless, the segment registered an operating income of $190 million, higher than the $152 million reported in fourth-quarter 2019. This upswing reflects the benefits of cost-saving actions, lower raw material costs, a one-time benefit related to a legal settlement and improvements in product mix.
Revenues in the Europe, Middle East and Africa segment were $1,193 million, up from the prior year’s $1,141 million. The reported figure also exceeded the Zacks Consensus Estimate of $1,114 million. The segment’s operating profit increased to $69 million during the quarter, up from the $38 million witnessed in the prior quarter, driven by the impact of lower raw material costs, improvements in product mix and the benefits of cost-saving actions.
Revenues in the Asia Pacific segment declined 2% year over year to $537 million. The reported figure, however, topped the consensus mark of $520 million. The segment’s operating profit came in at $43 million for the quarter, lower than the $52 million recorded in the corresponding period of 2019.
Goodyear — peers of which include Cooper Tire & Rubber Company CTB , Bridgestone Corp. BRDCY and Michelin MGDDY — had cash and cash equivalents of $1,539 million as of Dec 31, 2020, up from $908 million on Dec 31, 2019. As of Dec 31, 2020, long-term debt and finance leases amounted to $5,432 million, up from $4,753 million on Dec 31, 2019. Cash flow from operating activities as of Dec 31, 2020 summed $1,115 million, up from $1,207 million on Dec 31, 2019.
Currently, Goodyear carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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