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How Did Goodyear Tire & Rubber Perform in 3Q16?

Gabriel Kane - Author

Oct. 31 2016, Published 5:51 p.m. ET

Price movement

Goodyear Tire & Rubber (GT) has a market cap of $7.5 billion. It fell 9.0% to close at $28.29 per share on October 28, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -10.5%, -10.8%, and -12.8%, respectively, on the same day. GT is trading 11.3% below its 20-day moving average, 9.3% below its 50-day moving average, and 4.0% below its 200-day moving average.

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Related ETF and peers

The Schwab US Mid-Cap ETF (SCHM) invests 0.31% of its holdings in GT. The ETF tracks a market-cap-weighted index of mid-cap stocks in the Dow Jones US Total Stock Market Index. The YTD price movement of SCHM was 5.8% on October 28.

The market caps of GT’s competitors are as follows:

  • Cooper Tire & Rubber (CTB) — $1.9 billion
  • Boeing (BA) — $89.4 billion

Performance of Goodyear Tire & Rubber in 3Q16

Goodyear Tire & Rubber reported 3Q16 net sales of $3.8 billion, a fall of 9.5% from the net sales of $4.2 billion in 3Q15. This fall was due to the deconsolidation of its Venezuelan operations.

Its net income and EPS (earnings per share) rose to $317.0 million and $1.19, respectively, in 3Q16, compared with $271.0 million and $0.99, respectively, in 3Q15. This rise was due to some benefit from income tax and partially offset by rationalization charges. It reported adjusted EPS of $1.17 in 3Q16, a rise of 18.2% over 3Q15.

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GT’s cash and cash equivalents fell 33.9%, and its inventories rose by 11.8% between 4Q15 and 3Q16. Its current ratio rose to 1.4x, and its debt-to-equity ratio fell to 2.6x in 3Q16, compared with 1.2x and 3.0x, respectively, in 4Q15. During 3Q16, the company repurchased 1.7 million shares worth $50 million under its share repurchase program.


Goodyear Tire & Rubber expects total segment operating income in the range of $2 billion to $2.03 billion in fiscal 2016. Goodyear has confirmed the following financial targets:

  • annual segment operating income of $3.0 billion in 2020
  • cumulative free cash flow in the range of $4.3 billion to $4.9 billion between 2017 and 2020

Goodyear declares dividend

Goodyear Tire & Rubber has declared a quarterly dividend of $0.10 per share, a rise of 43%, on its common stock. The dividend will be paid on December 1, 2016, to shareholders of record on November 1, 2016. Next, we’ll look at Pool (POOL).


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