Analyst Upgrades

• Goodyear Tire (GT) to Overweight from Underweight at Morgan Stanley.
• Salix (SLXP) to Outperform from Market Perform at Wells Fargo.
• Euroseas (ESEA) to Outperform from Market Perform at FBR Capital.
• Norfolk Southern (NSC) and Hexcel (HXL) to Outperform from Sector Perform at RBC Capital.
• BB&T (BBT) and Triangle Capital (TCAP) to Buy from Neutral at Janney Capital.
• Mobile TeleSystems (MBT) to Outperform from Neutral at Credit Suisse.
• Affymax (AFFY) to Buy from Hold at Auriga.
• Vanguard Natural (VNR) and Tortoise Energy (TYY) to Outperform from Neutral at RW Baird.
• Protective Life (PL) to Neutral from Underperform at BofA/Merrill.

Goodyear Tire & Rubber (GT), North America's largest tire maker, posted losses in the forth quarter and for the year. This marks the third-straight annual loss.

To stave off further deterioration, the company is closing its Tennessee plant. In 2009, union negotiations left the plant unprotected, meaning that it could be closed at the company's discretion.

In this market, companies really have to earn their stock price gains. Most have to exceed earnings estimates -- in some cases by a 10% premium -- or the street treats the stock rudely.

Goodyear Tire & Rubber (GT), first discussed here on May 5, 2009 at a price of $13.30, is a classic example of this no-charity market.

The U.S. auto slump appears to ending, the global auto market will generate at least adequate tire demand, and GT is experience modest pricing power, but institutional investors have not fallen in love with GT yet, and the stock over the past five months has not been able to break decisively above resistance at $12.

The Goodyear Tire & Rubber Company (GT) was down big this afternoon. At one point, shares were off by over 9% to a quote of $10.53. The 52-week low for the stock is $9.10; the 52-week high is $16.48. Volume, as you might have guessed, is robust. I would therefore categorize the sentiment in this entity as decidedly bearish.

The one-year chart hammers home the notion. The downtrend is clearly noticeable. Of course, generally speaking, buying lower is preferable to buying higher. Do the third-quarter numbers give us a reason to seriously consider this name on the pullback?

The bear-hug formation by Goodyear Tire & Rubber Company (GT), on May 5, 2009 at a price of $13.30, appears to be over, and now may be good time to consider the shares.

After the August 30 stand aside observation, Goodyear continued to downtrend and took out key, psychological support at $10, dropping to a 2010 low of $9.10 in September. The stock has since move back above the $10 level, and closed Tuesday up 32 cents to $10.88, amid a broader market rally.

To be sure, this a stock market that's not giving companies the benefit of the doubt.

Case in point: Goodyear (GT), which I first wrote about on May 5, 2009 at a price of $13.30, has formed a bear hug, despite modest pricing power, increased capacity utilization, and a better overall sales mix.

Further, unless the U.S. economy, whose GDP growth slowed to 1.6% in the second quarter, lapses in to a double-dip recession, GT remains a growth story on likely, increasing U.S. vehicle tire sales in 2010-2011.

Let's take a look at two companies that reported quarterly numbers on Thursday. One is a concern that helps cars have a smooth, safe ride; the other is a business that helps consumers buy the electronics they need.

The Goodyear Tire & Rubber Company (GT) has a one-year chart that I would argue is not too attractive. The 52-week low on the stock is $9.65; the 52-week high is $18.84. Yesterday, the shares were under pressure after the release of the second-quarter report. They closed down 5.7% to $11.27 on Thursday. Volume was very strong.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Activision Blizzard Inc. (ATVI) saw shares rise following its report of better-than-expected Q1 earnings.
• Beazer Homes USA Inc. (BZH) posted a Q2 profit and revenue growth, and announced a stock offering.
• CBS Corp. (CBS) reported improvements in both Q1 net income and cash flow, but shares declined.
• Clorox Co. (CLX) posted Q3 earnings that were higher than analysts had expected and offered weak guidance.
• First Solar Inc. (FSLR) reported quarterly earnings that easily topped analysts' expectations.

Is Goodyear Tire and Rubber Company's (GT) first quarter performance saying something about the state of pricing power in mid-2010? Perhaps.

Excluding items and one-time charges, Goodyear reported first quarter earnings of 18 cents per share, compared to the Thomson/Reuters First Call estimate of a loss of 2 cents. Wall Street initially pushed the shares up, but quickly took back the gains, and the shares are trading about where they were prior to the first quarter report: around $14.

First quarter revenue increased 21% to $4.3 billion. Tire shipments totaled 43.9 million, up 14% compared to a year ago.

By now, nearly every person in this country has heard or read about a second oil rig accident which has happened near Morgan City, Louisiana. Although it appears that only a small amount of environmental damage was done, how will the reaction to this news play out in the markets through the coming week?

I'm very thankful that this most recent oil rig accident happened late on a Friday. I certainly believe that if this accident had happened a few hours earlier in the day, I probably wouldn't have liked to witness the way the markets reacted. Now, we have two days to absorb the news of what has happened before full-scale trading resumes. Really, I'm very happy about that.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Aflac Inc. (AFL) higher Q1 earnings were better than analysts expected, due in part to a stronger yen.
• Automatic Data Processing Inc. (ADP) Q3 EPS were the same as a year ago and revenue inched higher.
• BlackRock Inc. (BLK) higher Q1 earnings fell short of analysts' expectations due to acquisition-related charges.
• Broadcom Corp. (BRCM) posted record revenue in Q1 and swung to a profit from a year-ago loss.
• Burger King Holdings Inc. (BKC) topped Wall Street's Q3 earnings estimate, but same-store sales fell.

Akron-based Goodyear Tire & Rubber (GT) announced that its first-quarter loss was "significantly smaller" than last year's first-quarter loss. The smaller loss was realized despite a one-time charge stemming from currency devaluation in Venezuela.

Goodyear's president and CEO Richard J. Kramer noted that the company is "very pleased with our strong first quarter [sic] performance," adding that the company believes it is "starting to see the benefits of the strategic actions [it] took last year, including [the] commitment to launch innovative new products during an economic downturn." Kramer attributes the company's gains in both sales and earnings to these strategic actions.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Abercrombie & Fitch Co. (ANF) lower Q4 earnings topped estimates and same-store sales also declined.
• Campbell Soup Co. (CPB) reaffirmed its earnings outlook but lowered its revenue forecast for the full year.
• Daimler AG (DAI) provided guidance for the year that included slashing its dividend, sending shares lower.
• Dell Inc. (DELL) lower Q4 earnings beat estimates by a penny but it didn't offer guidance, sending shares lower.
• Goodyear Tire & Rubber Co. (GT) easily topped Q4 earnings estimates and revenue increased as well.

Goodyear Tire & Rubber (GT) beat the projections on Wall Street this week by a comfortable margin. The call was for a loss of 9 cents per share in the fourth quarter. Would you believe that, on an adjusted basis, Goodyear actually delivered a profit? A profit of 14 cents per share?

You can check out a summary of the release at DailyFinance. Yeah, it appears as if the analysts were a little bit off this reporting period. Then again, I wouldn't blame them for being pessimistic. Back in October, all indicators pointed to a tough Q4 for the company. The stock was hammered at the time.

As so often happens at this point in the earnings season, focus begins to shift to the results from retailers. And the world's largest retailer is among those that step into the spot light this week.

Analysts surveyed by Thomson Reuters are looking for Wal-Mart Stores Inc. (WMT), which was aggressively competitive during the holiday shopping season and also recently announced a new global strategy, to report fourth-quarter earnings of $1.12 per share, up from $1.03 per share in the year-ago period. Revenue for the three months that ended in January is expected to have risen 4.9% to $114.5 billion. The full-year forecast calls for earnings of $3.61 per share (+5.3%) on $409.1 billion in revenue (+0.9%). Walmart has not missed earnings estimates in the past five quarters.