Shares of Goodyear Tire GT plunged 33.5% since the company reported second-quarter 2024 results. It reported second-quarter 2024 adjusted earnings per share (EPS) of 19 cents, surpassing the Zacks Consensus Estimate of 9 cents. The company had incurred a loss of 34 cents in the year-ago quarter.

The company generated net revenues of $4.57 billion, which declined 6.1% on a year-over-year basis and missed the Zacks Consensus Estimate of $4.79 billion due to lower replacement volume.

In the reported quarter, tire volume was 40.1 million units, down 1.7% from the year-ago period's levels.

The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise

The Goodyear Tire & Rubber Company price-consensus-eps-surprise-chart | The Goodyear Tire & Rubber Company Quote

Segmental Performance

In the reported quarter, the Americas segment generated revenues of $2.69 billion, which declined 8.2% year over year and missed our estimate of $2.82 billion due to lower replacement volume and unfavorable price/mix. The segment registered an operating income of $241 million, which surged 134% from the year-ago period's figures. The operating margin benefited from lower transportation costs, Goodyear Forward initiatives and favorable net price/mix. The figure surpassed our expectation of $224.4 million.

Revenues in the Europe, Middle East and Africa segment were $1.28 billion, down 4.6% from the year-ago period's levels due to the adverse impact of foreign currency exchange rates and lower replacement volume. The figure also missed our estimate of $1.35 billion. The operating income for the segment was $35 million, which rose 284.2% on a year-over-year basis due to favorable net price/mix, a net gain on insurance recoveries and the Goodyear Forward plan. 

Revenues in the Asia Pacific segment rose 1.2% year over year to $594 million due to higher original equipment volume but missed our estimate of $615.3 million. The segment’s operating profit was $63 million, up 57.5% from the year-ago quarter’s figure due to favorable net price/mix, higher volume and benefits from the Goodyear Forward plan. The figure, however, missed our estimate of $65.2 million.

Financial Position

Selling, general & administrative expenses rose to $731 million from $708 million in the year-ago period.

Goodyear had cash and cash equivalents of $789 million as of Jun 30, 2024, down from $902 million as of Dec 31, 2023.

Long-term debt and finance leases amounted to $6.83 billion as of Jun 30, 2024, the same as of Dec 31, 2023.

Capital expenditure in the quarter was $634 million, up from $536 million reported in the year-ago quarter.