The Goodyear Tire & Rubber Company
) reported a 28.3% rise in earnings per share to 68 cents in the
third quarter of 2013 compared with 53 cents a year ago (all
excluding special items). The reported earnings beat the Zacks
Consensus Estimate of 66 cents. Net income escalated 28.9% to
$183 million from $142 million in the third quarter of 2012.
Including special items, the company reported a profit of $166
million or 62 cents per share in the quarter compared with $110
million or 41 cents a year ago.
Revenues in the quarter slipped 5% to $5 billion, missing the
Zacks Consensus Estimate of $5.3 billion. The year-over-year
decline in revenues reflects $178 million lower sales in other
tire related businesses, specifically a decline in price and
volume of third-party chemical sales. In addition, $89 million
lower price/mix and $77 million unfavorable foreign currency
translation adversely affected the revenues of the company. These
were partially offset by 82 million increases in tire unit
Operating income grew 24% to $431 million from $348 million a
year ago. The improvement was driven by favorable price/mix and
lower unabsorbed overhead due to higher production and higher
tire unit volumes. These were partially offset by adverse impacts
of foreign currency translation and higher SAG expenses.
Revenues from the North American Tire segment dipped 9.1% to $2.2
billion. However, tire unit volumes increased marginally to 15.8
million from 15.6 million a year ago. The year-over-year decline
in revenues was driven by lower sales from other tire-related
businesses, mostly third-party chemical sales and lower
price/mix. This offset the favorable impacts from increased tire
Revenues from the Europe, Middle East and Africa Tire segment
increased marginally to $1.8 billion. Revenues benefited from 3%
increase in tire unit volumes to 16.7 million and favorable
foreign currency translation, partially offset by lower
Revenues from Latin America increased 1.3% to $527 million on the
back of improved price/mix and higher sales in other tire-related
businesses, partially offset by unfavorable foreign currency and
decrease in tire unit volume to 4.5 million.
Revenues from the Asia-Pacific Tire segment fell 9.3% to $537
million due to lower price/mix, reduced sales in other
tire-related businesses and unfavorable foreign currency
translation, partially offset by volumes increasing to 5.6
Goodyear had cash and cash equivalents of $2.5 billion as of Sep
30, 2013, up from $2.3 billion as of Dec 31, 2012. Long-term debt
and capital leases were $6.5 billion as of Sep 30, 2013 compared
with $5.0 billion as of Dec 31, 2012. This translated into a
long-term debt-to-capitalization ratio of 84.4% as of Sep 30,
2013 compared with 88.9% as of Dec 31, 2012.
Cash outflow from operations in the first nine months of 2013
dropped to $298 million from $329 million in the first nine
months of 2012. Capital expenditure was $734 million compared
with $788 million in the same period a year ago.
Goodyear expects consumer replacement as well as commercial
replacement and commercial original equipment markets to be flat
in North America compared with 2012. It expects consumer original
equipment volumes to be up 5% in North America.
In Europe, Goodyear anticipates consumer replacement industry to
be flat and consumer original equipment to be flat to down 5%.
The company also expects commercial replacement demand to
increase 5% and original equipment volumes to be flat to up 5%
for the year.
Goodyear Tire & Rubber Company is one of the largest tire
manufacturing companies worldwide, selling its products under the
Goodyear, Kelly, Dunlop, Fulda, Debica, Sava and various other
"house" brand names as well as private-label brands. The company
currently retains a Zacks Rank #2 (Buy).
Stocks that are worth looking for in the same industry include
). They carry a Zacks Rank #1 (Strong Buy).
DENSO CORP (DNZOY): Get Free Report
GENTEX CORP (GNTX): Free Stock Analysis
GOODYEAR TIRE (GT): Free Stock Analysis
OSHKOSH CORP (OSK): Free Stock Analysis
To read this article on Zacks.com click here.