Why Goodyear Tire & Rubber (GT) Stock Is Down Today

NEW YORK (TheStreet) --Shares of The Goodyear Tire & Rubber Company (GT) are down -4.46% to $25.95 on Tuesday after the company released its first quarter 2014 earnings, which showed losses in Latin America and Asia. 

Overall the company reported a 33.3% rise in earnings to 56 cents per share, compared to 42 cents per share during the same quarter last year.

Goodyear's revenue fell -8.2% year-over-year to $4.5 billion from the $4.9 billion reported during the first quarter 2013.   

Sales in Latin America fell -18% to $422 million from $513 million reported during the first quarter 2013.

First quarter operating income in Latin America was down -30% to $42 million in the first quarter 2014 from $60 million in the first quarter 2013.

Sales in Asia decreased -13% to $492 million from $567 million reported during the previous year. Operating income was down -23% to $65 million compared to the $84 million reported in the first quarter 2013.

Must Read: Warren Buffett's 10 Favorite Growth Stocks 

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. 

TheStreet Ratings team rates GOODYEAR TIRE & RUBBER CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GOODYEAR TIRE & RUBBER CO (GT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • This stock has managed to rise its share value by 125.41% over the past twelve months. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • GOODYEAR TIRE & RUBBER CO has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GOODYEAR TIRE & RUBBER CO increased its bottom line by earning $2.23 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($3.01 versus $2.23).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 3257.1% when compared to the same quarter one year prior, rising from $7.00 million to $235.00 million.
  • GT, with its decline in revenue, underperformed when compared the industry average of 7.3%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Auto Components industry and the overall market, GOODYEAR TIRE & RUBBER CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: GT Ratings Report
STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months.Learn more.

More from Markets

Video: Jim Cramer on Apple, Procter & Gamble, Nucor and Acacia Communications

Video: Jim Cramer on Apple, Procter & Gamble, Nucor and Acacia Communications

Video: Jim Cramer Reveals Why Stocks Are Moving Lower Thursday

Video: Jim Cramer Reveals Why Stocks Are Moving Lower Thursday

Dow Falls, S&P 500 Lower as Amazon Rises, Apple and P&G Slump

Dow Falls, S&P 500 Lower as Amazon Rises, Apple and P&G Slump

Soaring Nickel Prices Could Be Bad News for Electric Carmakers Like Tesla

Soaring Nickel Prices Could Be Bad News for Electric Carmakers Like Tesla

Video: The Road to S&P 500 2,800 Is 'Slow and Choppy'

Video: The Road to S&P 500 2,800 Is 'Slow and Choppy'