uploads/2016/10/gt-pm.png

How Did Goodyear Tire & Rubber Perform in 3Q16?

By

Updated

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.

Article continues below advertisement

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.

Article continues below advertisement

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.

Projection

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).

Advertisement

More From Market Realist