Yahoo Finance Goodyear (GT) Issues Q1 Preliminary Results, Scraps Dividend
Goodyear Tire GT recently released its preliminary financial results for first-quarter 2020. The company’s overall results in the quarter were affected by the economic disruption caused by the coronavirus pandemic. Results also came in significantly lower than the year-ago quarter numbers.
Per the latest announcement, the company’s revenues during the first quarter of 2020 totaled $3 billion, down from the $3.6 billion recorded in the prior-year period. Its overall tire volume also fell 18% from the prior-year level to 31 million units, primarily due to substantial declines in global original equipment shipments. Further, Goodyear anticipates to post a pretax loss of $185-$195 million in the first quarter of 2020.
Moreover, Goodyear is evaluating opportunities to boost the firm’s cash position in the face of the rising uncertainties due to the coronavirus crisis. The company expects 2020 capital expenditures to be no more than $700 million. It also suspended the quarterly dividend temporarily, which is likely to preserve approximately $37 million of cash on a quarterly basis. In addition, the company refinanced its $2-billion asset-based revolving credit facility, extending the maturity to 2025.
Furthermore, it has enforced a variety of measures, including a substantial reduction in discretionary spending, furloughs, and temporary salary reductions and deferrals for the CEO, officers and directors, in a bid to minimize costs during this period of reduced business.
As of Mar 31, 2020, Goodyear’s total liquidity was $3.6 billion, including about $970 million in cash and cash equivalents, which will be used to deal with the downturns caused by the pandemic. Its total debt balance stood at $6.5 billion as of Mar 31.
Meanwhile, Goodyear’s plant in China is operating with 100% of its workforce and expects to continue ramping up production in the second quarter. The firm also plans a phased restart of production during the current quarter, with some of its commercial truck tire facilities in the United States and Europe, as it anticipates economic recovery from the crippling impact of the pandemic.
Zacks Rank & Stocks to Consider
Goodyear currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Weichai Power Co. WEICY, Veoneer, Inc. VNE and Unique Fabricating, Inc. UFAB, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Goodyear Tire & Rubber Company (GT) : Free Stock Analysis Report
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