Benzinga | Feb 8, 2021 10:16AM EST

Earnings Preview: Goodyear Tire & Rubber

On Tuesday, February 09, Goodyear Tire & Rubber (NASDAQ:GT) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Goodyear Tire & Rubber earnings will be near $0.16 per share on sales of $3.61 billion, according to analysts. In the same quarter last year, Goodyear Tire & Rubber reported EPS of $0.19 on revenue of $3.71 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate, earnings would be down 15.79%. Sales would be down 2.77% from the same quarter last year. Goodyear Tire & Rubber's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q3 2020 Q2 2020 Q1 2020 Q4 2020EPS Estimate -0.06 -2.07 -0.15 0.52EPS Actual 0.10 -1.87 -0.60 0.19Revenue Estimate 3.29 B 1.87 B 3.24 B 3.89 BRevenue Actual 3.46 B 2.14 B 3.06 B 3.71 B

Stock Performance

For a full 12 months, the return has risen by 9.6%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Goodyear Tire & Rubber is scheduled to hold the call at 09:00:00 ET and can be accessed here.