During its recent investor meeting, Goodyear Tire & Rubber Co. shared its goals and strategies for the next three years as well as its capital allocation plan. The company also reinstated a cash dividend on common stock, according to a press release.
The tiremaker reconfirmed its 2013 outlook for segment operating income is roughly $1.5billion and is targeting an operating income growth of 10%-15% through 2016. Additionally, Goodyear is aiming for a positive cash flow, excluding its pension pre-funding, through 2016, the company said.
As part of its capital allocation plan, Goodyear reinstated a quarterly cash dividend on its common stock and a $100million 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 Richard J. Kramer, chairman and chief executive officer.
Kramer said the company’s ongoing success and confidence in its strategies will provide immediate returns through the reinstated common stock dividend and share repurchase program. The last time the tire maker paid a common stock dividend was in December 2002.
This year the company’s directors have declared a quarterly dividend of 5 cents per share of common stock. The dividend is payable Dec. 1 to all shareholders of record as of Nov. 1. Future dividends will be subject to the approval of the company’s board.
Under is share repurchase program, Goodyear is to acquire up to $100 million of its common stock. According to the tiremaker, the repurchases are intended to offset new shares given 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.
