GOODYEAR TIRE & RUBBER CO. $30.78 - Nasdaq symbol GT

GOODYEAR TIRE & RUBBER CO. $30.78 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 268.9 million; Market cap: $8.2 billion; Dividend yield: 0.9%) is one of the world’s largest tire makers, with 52 plants in 22 countries. In the three months ended December 31, 2015, Goodyear’s revenue fell 6.7%, to $4.06 billion from $4.36 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales (particularly in Europe and Brazil) by $339 million. Excluding one-time items, earnings rose 12.0%, to $257.0 million, or $0.93 a share. A year earlier, the company earned $166.0 million, or $0.59 a share. Falling costs fuel gains The higher profits came from lower costs, including for oil, rubber and other raw materials,. The company’s leading share in the fast-growing market for high-end replacement tires also contributed. They cost more than basic models but provide better performance, safety and fuel economy. North America is the largest market for these tires, and Goodyear is building a $550-million plant in Mexico to support rising demand. The facility will start up in mid-2017 and produce up to six million highperformance tires a year. Brands will include the company’s new Kelly Edge tires, as well as Wrangler All- Terrain Adventure and Assurance Fuel Max. Goodyear reaffirmed its targets for the next 12 months and expects its earnings to rise 10% to 15%. The stock trades at just 8.2 times the $3.75 a share the company is forecast to earn in 2016. It yields 0.9%. Goodyear Tire & Rubber is a buy.

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