Goodyear Strike Punctures Net Income

Even though Goodyear Tire & Rubber reported record Q4 sales of nearly $5 billion (+2%) and eclipsed $20b (3%) for the first time in a calendar year, net income was negatively impacted by an ongoing strike. Goodyear reported a $358m Q4 loss, or $2.02/share, attributing $367m of the loss to the strike, $184m ($1.03/share) to restructuring costs and said it gained $153m ($0.86/share) from a favorable resolution of a tax contingency. Excluding certain items, Q4 net loss totaled $35m, or $0.20/share, better than analysts' average estimate of -$0.40/share. Last Q4 Goodyear had a net loss of $51m, or $0.29/share. Strength in overseas markets helped Goodyear offset some of its troubles in North America. Also, Goodyear is poised to benefit from lower materials costs. Its shares are trading 1.8% lower to $24.95 in pre-market activity on thin volume after closing at $25.41 (+2.25%) yesterday.

Sources: Press release, The Wall Street Journal
Commentary: S&P 500's Most Overbought, Oversold Stocks • Bad Blood Remains After Goodyear Strike
Stocks/ETFs to watch: Goodyear Tire & Rubber (GT). Competitors: Cooper Tire and Rubber (CTB), Bridgestone Corp. ADR (BRDCY.PK), Continental AG (CTTAY.PK), Michelin Group (Euronext: ML)

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