Goodyear outlook outshines ATN

Article Excerpt

GOODYEAR TIRE & RUBBER CO. $23.69 (Nasdaq symbol GT; TSINetwork Rating: Average) (330-796-2122;; Shares o/s: 237.0 million; Market cap: $5.9 billion; Dividend yield: 2.4%) is one of the world’s largest tire makers. It has 47 production plants in 21 countries. For the three months ended June 30, 2018, the company earned $150 million, or $0.62 a share, excluding one-time items. That’s a drop of 15.3%, from $177 million, or $0.70, a year earlier. The earnings decline was partly due to slowing vehicle sales in North America. Higher raw material costs, mostly due to rising oil prices, also contributed. Revenue rose 4.2%, to $3.84 billion from $3.69 billion. While Goodyear sold fewer tires overall, it sold more high-profit-margin premium tires. The company faces a number of near-term challenges. These include a continued rise in raw material costs, a stronger U.S. dollar that cuts the contribution of foreign sales, and softening market conditions in China. Still, the long-term outlook for Goodyear is positive. Replacement tire demand should rise given…

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