Goodyear Reports Earnings Under the Mark, After Items

Goodyear Tire & Rubber Company (NYSE: GT) has just reported its quarterly earnings. Net income available to common shareholders was $85 million, or $0.33 per share, up from $40 million and $0.16 per share a year ago. Goodyear’s second-quarter 2012 sales were down 8% from last year to $5.2 billion, reflecting weaker economic conditions and unfavorable foreign currency translation. Revenue per tire rose 8%, but currency took out 6% from sales.

The extraordinary items came to $0.27 in per share charges, and a $0.03 gain … so if we trust the company’s extraordinary items we would get a normalized non-GAAP earnings of $0.57 per share, assuming that these items are all truly considered as one-time events. Thomson Reuters was looking for $0.45 EPS and $5.74 billion in sales.

Tire volume was down 9% to 39.2 million. The tire giant now expects that its full-year tire unit volume for 2012 will be approximately 5% to 7% under that of 2011. Chairman and CEO Richard Kramer said, “The long-term industry MegaTrends remain in place. We expect global tire demand to recover and we remain committed to our 2013 target of $1.6 billion in segment operating income.”

Goodyear shares closed ta $10.37 on Monday, and the 52-week range is $8.53 to $16.12. Analysts had a consensus price target of $17.29, without the consideration of the earnings report, and the market cap is currently just over $2.5 billion.

JON C. OGG