Why Is Goodyear (GT) Down 11.8% Since Last Earnings Report?

Core Viewpoint - Goodyear's recent earnings report shows mixed results, with adjusted earnings per share beating estimates but revenues declining, leading to concerns about future performance [2][6]. Financial Performance - Goodyear reported Q2 2024 adjusted EPS of 19 cents, exceeding the Zacks Consensus Estimate of 9 cents, compared to a loss of 34 cents in the same quarter last year [2]. - Net revenues for the quarter were $4.57 billion, down 6.1% year-over-year, missing the Zacks Consensus Estimate of $4.79 billion due to lower replacement volume [2]. - Tire volume decreased to 40.1 million units, a decline of 1.7% from the previous year [2]. Segmental Performance - The Americas segment generated revenues of $2.69 billion, an 8.2% decline year-over-year, missing estimates due to lower replacement volume and unfavorable price/mix, but operating income surged 134% to $241 million [3]. - The Europe, Middle East, and Africa segment's revenues were $1.28 billion, down 4.6% year-over-year, also missing estimates, while operating income rose 284.2% to $35 million [3]. - The Asia Pacific segment saw a 1.2% increase in revenues to $594 million, but it still missed estimates; operating profit increased 57.5% to $63 million [4]. Financial Position - Selling, general & administrative expenses increased to $731 million from $708 million year-over-year [5]. - Cash and cash equivalents decreased to $789 million as of June 30, 2024, down from $902 million at the end of 2023 [5]. - Long-term debt remained stable at $6.83 billion, while capital expenditures rose to $634 million from $536 million in the previous year [5]. Updated Outlook - The company expects a benefit of $260 million on raw material costs in 2024, revised down from a previous estimate of $325-$350 million [6]. - Capital expenditures are now projected at $1.25 billion, slightly up from the previous estimate [6]. - Interest expenses are estimated between $510 million and $530 million, down from the earlier range [6]. Estimate Trends - There has been a downward trend in estimates, with the consensus estimate shifting down by 31.87% [7]. - Goodyear currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [9]. VGM Scores - Goodyear has a strong Growth Score of A but lags in Momentum Score with an F; it holds an aggregate VGM Score of A, placing it in the top quintile for value strategy [8].