Shares of tire maker Goodyear Tire and Rubber (NYSE: GT) are trading up nicely in the premarket after the Akron, Ohio based company posted a profit of 60 cents a share for its first quarter, easily surpassing analyst estimates.During its first quarter last year, the company posted a $174 million dollar loss, or -94 cents a share, and going into today's earnings report Wall Street had been looking to see the company show Q1 earnings of 47 cents. So with the actual numbers, Goodyear is looking for a good day in today's action. Excluding one-time items, the company stated that it had earned 67 cents per share.
Currently the stock has moved up 4.5% in premarket trading following its earnings release.
One of the factors contributing to the dramatic reversal of fortunes from last year's first quarter was the 12-week United Steelworkers strike that impacted its Q1 2007 quarter. To refresh your memory, the strike started in October 2006 and ran into the start of 2007. Another difference is that the 2007 quarter contained the company's engineered products business. Goodyear sold off almost all of this division in August to The Carlyle Group for a reported $1.4 billion.
The company noted that a big reason for this quarter's knockout numbers was its focus on higher-end tire products which enabled it able to thrive despite the current economic slowdown in America. While the company sold fewer tires world wide, the average price per tire rose by an impressive 7%.
All in all a great quarter for America's largest tire maker.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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