On Jun 16, 2014, we issued an updated research report on
The Goodyear Tire & Rubber Company
The company reported positive earnings surprises in 3 of the
trailing 4 quarters. Goodyear reported an impressive 33.3% rise in
earnings per share to 56 cents in the first quarter of 2014 from 42
cents a year ago (all excluding special items). However, earnings
missed the Zacks Consensus Estimate of 60 cents. Net income
escalated to $156 million from $118 million in the first quarter of
Revenues in the quarter fell 8.2% year over year to $4.5
billion, also missing the Zacks Consensus Estimate of $4.75
billion. The decrease in revenues can be attributed to a $202
million impact of lower sales in other tire-related businesses,
specifically due to a decline in third-party chemical sales in
Moreover, Goodyear's capital deployment strategy, innovative
product launches and efforts to improve margins are yielding
results. However, weakness in Latin America, rising long-term debt
and capital expenditure and falling cash balance are reasons for
Goodyear currently carries a Zacks Rank #3 (Hold). The Zacks
Consensus Estimate for the company's 2014 earnings stands at $2.87
per share, up 9.41% from 2013.
Goodyear projects that the segment operating income will grow
10-15% annually till 2016. It also aims to attain positive cash
flow (excluding pension pre-funding) till 2016. Moreover, the
company expects a 2-3% increase in unit volumes in 2014.
Key Picks from the Sector
Some better-ranked automobile stocks worth considering include
Fox Factory Holding Corp
Tower International, Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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GOODYEAR TIRE (GT): Free Stock Analysis Report
GENTHERM INC (THRM): Free Stock Analysis Report
TOWER INTL INC (TOWR): Free Stock Analysis
FOX FACTORY HLD (FOXF): Free Stock Analysis
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