Goodyear Tire stock jumps after profit rises well above expectations
Shares of Goodyear Tire & Rubber Co.
jumped 4.0% in premarket trading Friday, after the tire maker reported fourth-quarter profit that rose well above expectations as revenue growth to a near 10-year high and higher selling prices helped offset inflationary cost pressures. Net income increased to $553 million, or $1.93 a share, from $63 million, or 27 cents a share, in the year-ago period. Excluding nonrecurring items, such as a $379 million tax benefit, adjusted earnings per share rose to 57 cents from 44 cents, beating the FactSet consensus of 32 cents. Sales grew 38.2% to $5.05 billion, boosted by the Cooper Tire acquisition, to top the FactSet consensus of $5.01 billion. Cost of sales rose 42.1% to $3.97 billion, as gross margin fell to 21.5% from 23.6%. “We achieved our highest fourth quarter revenue in nearly 10 years as demand for our products remained strong and we captured higher selling prices,” said Chief Executive Richard Kramer. “Looking ahead, we expect inflationary pressures to persist over the next several quarters.” The stock has lost 7.3% over the past three months through Thursday, while the S&P 500
has eased 3.1%.