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Goodyear Outlines Plans For Earnings Growth, Reinstates Dividend

Stocks in this article: GT

NEW YORK, Sept. 20, 2013 /PRNewswire/ -- The Goodyear Tire & Rubber Company (NASDAQ: GT) at an investor meeting here today will discuss, among other topics, its strategies and goals for the next three years and its capital allocation plan.

(Logo: http://photos.prnewswire.com/prnh/20050204/GTLOGO )

Goodyear reconfirmed its outlook for 2013 segment operating income of about $1.5 billion and is targeting annual segment operating income growth of 10 percent to 15 percent through 2016. In addition, the company is targeting positive cash flow, excluding pension pre-funding, through 2016.

The company also announced its capital allocation plan that includes the reinstatement of a quarterly cash dividend on its common stock and a $100 million share repurchase program.

"Our capital allocation plan demonstrates Goodyear's commitment to creating value for shareholders while maintaining financial flexibility to execute our strategic plan, continuing to strengthen our balance sheet and investing for future growth," said Chairman and Chief Executive Officer Richard J. Kramer.

He said the company's ongoing success and confidence in its strategies allow it to provide immediate returns through the common stock dividend and share repurchase program. Goodyear last paid a common stock dividend in December 2002.

Goodyear's directors have declared a quarterly dividend of 5 cents per share of common stock. The dividend is payable December 1, 2013, to shareholders of record November 1, 2013. The payout represents an annual rate of 20 cents per share. Future dividends will be subject to Board approval.

The share repurchase program authorized by the company's directors, calls for Goodyear to acquire up to $100 million of its common stock. The repurchases are intended to offset new shares issued under equity compensation programs.

"Driven forward by the disciplined execution of our strategy and building on the growing momentum in our business, the plans we are announcing today put us on a path to achieve consistent earnings growth and value creation," Kramer said.

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