Goodyear Tire & Rubber Shares Plunged: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Goodyear Tire & Rubber (NYS: GT) rose more than 10% in early trading after CFO Darren Wells gave investors hope for its first profitable year since 2007.
So what: Wells told the audience at the J.P. Morgan Auto conference in Detroit that Goodyear was successfully offsetting rising raw-materials costs with a strategy of targeted pricing and marketing of higher-priced tires, The Associated Press reported.
Now what: Color me surprised that investors were surprised by this news. Just two weeks ago, Goodyear reported blowout second-quarter earnings, thanks in part to a much higher gross margin. Signs were already pointing to tight cost controls -- Wells merely reaffirmed what we already knew. Do you agree? Disagree? Weigh in using the comments box below.
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