News Alert: The Goodyear Tire & Rubber Company (NASDAQ: GT)

On Monday, Shares of The Goodyear Tire & Rubber Company (NASDAQ: GT) rose 1.49% to $19.77. The stock traded total volume of 2,614,386 shares lower than the average volume of 5.20M shares.

The Goodyear Tire & Rubber Company (GT) recently stated results for the fourth quarter and full-year of 2018.

Goodyear’s fourth quarter 2018 sales were $3.90B, down 5 percent from $4.10B a year ago, driven by unfavorable currency translation and lower volume. These effects were partially offset by improvements in price/mix.

Tire unit volumes totaled 40.70M, down 3 percent from 42.00M a year ago.  Replacement tire shipments were nearly flat contrast with a year ago, as growth in Europe was offset by weakness in Brazil and China. Original equipment unit volume was down 10 percent, mainly because of lower automotive production in China and India.

Goodyear’s net income was $110.0M ($0.47 per share) in the fourth quarter of 2018 contrast to a net loss of $96.0M ($0.39 per share) a year ago. Fourth quarter 2018 adjusted net income was $120.0M ($0.51 per share) contrast to $245.0M ($0.99 per share) in 2017. Per share amounts are diluted.

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The company stated fourth quarter segment operating income of $307.0M in 2018, down from $430.0M a year ago. The decrease reflects higher raw material costs, weaker results from other tire-related businesses, lower volume and the unfavorable impact of foreign currency translation, which were partially offset by improved price/mix, net cost savings and improved overhead absorption.

Full-Year Results

Goodyear’s 2018 sales were $15.50B, up 1 percent from the prior year, driven by improvements in price/mix, partially offset by unfavorable foreign currency translation. Tire unit volumes totaled 159.20M, unchanged from the prior year. Replacement tire shipments were up 1 percent. Original equipment unit volume was down 4 percent.

Goodyear’s 2018 net income of $693.0M ($2.89 per share) was up from $346.0M ($1.37 per share) in 2017. Goodyear’s net income in 2018 included a net gain after-tax and minority interest of $207.0M resulting from the TireHub transaction, net of transaction costs. Goodyear’s net income in 2017 included net charges after minority interest of $292.0M resulting from net discrete tax items. Full-year 2018 adjusted net income was $555.0M ($2.32 per share), down from $790.0M ($3.12 per share) a year ago.

The company stated 2018 segment operating income of $1.30B in 2018, down
18 percent from $1.60B a year ago. The decrease was mainly attributable to increased raw material costs, weaker results from other tire-related businesses and unfavorable foreign currency translation, which were partially offset by net cost savings and improved overhead absorption.

GT has the market capitalization of $4.58B and its EPS growth ratio for the past five years was 5.30%. The return on assets ratio of the Company was 4.00% while its return on investment ratio stands at 9.10%. Price to sales ratio was 0.30 while 92.00% of the stock was owned by institutional investors.

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