Goodyear (GT) Q2 Earnings Beat Estimates, Sales Soar 86% Y/Y

The Goodyear Tire & Rubber Company GT reported second-quarter 2021 adjusted earnings per share of 32 cents, surpassing the Zacks Consensus Estimate of 17 cents and turning around from the year-ago loss of $1.87. High sales volumes, revenues and operating income from the Europe, Middle East and Africa (EMEA) and Asia Pacific units drove the results.

The company registered net revenues of $3,979 million, surging 86% on a year-over-year basis on higher volume, favorable currency translation and synergies from the Cooper Tire buyout. In addition, revenues beat the Zacks Consensus Estimate of $3,797 million.

For the reported quarter, tire volume was 37.5 million units, up 84% from the year-ago period. Replacement tire shipments increased 78% year on year, reflecting sustained industry recovery and market share gains. Original equipment unit volume skyrocketed 109% year on year on increased market share and higher vehicle production.

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 $2,256 million, way higher than the prior-year period’s $1,134 million. The segment registered an operating income of $233 million, reversing the loss of $287 million incurred in the corresponding quarter of 2020. Higher volume, favorable price/mix and cost-cut efforts aided operating margins.

Revenues in the Europe, Middle East and Africa segment were $1,230 million, jumping 82% from the year-ago period. The segment’s operating profit came in at $43 million for the quarter against a loss of $110 million witnessed in the prior year, driven by improvements in price/mix and high volumes.

Revenues in the Asia Pacific segment increased 48% year over year to $493 million. The segment’s operating profit came in at $23 million for the quarter versus $34 million loss incurred in the corresponding period of 2020.

Goodyear — which shares space with other auto stocks including Bridgestone BRDCY, Magna MGA and Michelin MGDDY in the same sector —had cash and cash equivalents of $1,030 million as of Jun 30, 2021, down from $1,539 million on Dec 31, 2020. As of Jun 30, 2021, long-term debt and finance leases amounted to $6,978 million, up from $5,432 million on Dec 31, 2020. Currently, Goodyear carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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