NEW YORK (TheStreet) -- Shares of Goodyear Tire & Rubber (GT - Get Report) fell 5.69% to $26.44 in morning trading Tuesday after the company said it now expects full-year 2014 segment operating income (SOI) growth to be slightly below its original 10% to 15% range.
Goodyear changed its expectations primarily because of a more challenging industry environment in Europe in the fourth quarter and a stronger dollar globally.
The company also said it anticipates flat global volume and expects fourth-quarter impact of the aforementioned developments to be 15 cents to 20 cents per share below expectations at the time of the third-quarter call.
Exclusive Report: Jim Cramer’s Best Stocks for 2015
More than 4.4 million shares had changed hands as of 11:05 a.m., compared to the daily average volume of 4,206,910.
Separately, 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 multiple 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, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GOODYEAR TIRE & RUBBER CO's earnings per share declined by 6.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($3.00 versus $2.23).
- Net operating cash flow has increased to $195.00 million or 18.90% when compared to the same quarter last year. Despite an increase in cash flow, GOODYEAR TIRE & RUBBER CO's average is still marginally south of the industry average growth rate of 22.45%.
- GT, with its decline in revenue, underperformed when compared the industry average of 4.1%. Since the same quarter one year prior, revenues slightly dropped by 6.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Auto Components industry and the overall market, GOODYEAR TIRE & RUBBER CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: GT Ratings Report