Markets
GT

Goodyear's (GT) Q3 Earnings Beat Estimates, Revenues Miss

The Goodyear Tire & Rubber Company GT is one of the world's largest tire manufacturing companies, selling under Goodyear, Kelly, Dunlop, Fulda, Debica, Sava and various other brands. The company regularly launches innovative products and services to boost sales. Although Goodyear generates worldwide sales, North America is its leading market. It is also expanding in emerging markets to boost profits. As a result, Goodyear attained record-high segment operating income in 2014 and first-half 2015.

However, Goodyear's revenue has been declining over the years. The company has also been facing challenges in terms of a volatile political and economic environment and high currency fluctuations in Latin America. Pricingp ressure from original equipment manufacturers also negatively impacts the company's profit margins.

Estimate Trend & Surprise History

Investors should note that the third-quarter earnings estimates for Goodyear increased to 98 cents from 95 cents over the last 7 days.

Moreover, the company delivered positive earnings surprises in each of the last four quarter with an average beat of 14.44%. Investors have been eagerly awaiting Goodyear's latest earnings report to see whether it delivers an earnings beat in the third quarter as well.

Zacks Rank

Goodyear currently has a Zacks Rank #2 (Buy), but that could change following its earnings report which was just released. We have highlighted some of the key stats from the company's earnings announcement below:

Earnings Surpass Estimates, Rise Y/Y

Goodyear reported adjusted earnings of 99 cents per share in the third quarter of 2015, marginally surpassing the Zacks Consensus Estimate of 98 cents. Adjusted earnings were higher than 87 cents generated in the year-ago quarter.

Revenues Miss Estimates, Fall Y/Y

Goodyear logged revenues of $4.18 billion, marginally missing the Zacks Consensus Estimate of $4.20 billion. Moreover, revenues were lower than $4.66 billion posted a year ago, mainly due to unfavorable foreign currency translation.

Key Stats/Developments to Note

Goodyear expects annual segment operating income to increase 10-15% in 2015 and 2016. The company also aims to generate positive free cash flow (excluding pension pre-funding) over this period.

During the reported quarter, Goodyear repurchased 1 million shares of its common stock for $30 million.

Market Reaction

Goodyear's share price has fallen 1.56% so far, following the release. Clearly, the initial reaction to the release is negative.

Check back later for our full write up on Goodyear's earnings report!

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

GOODYEAR TIRE (GT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GT

Other Topics

Earnings Investing Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More