Goodyear Tire & Rubber Co (NASDAQ:GT) jumped the most in six months on Wednesday after it posted profit that topped analysts’ expectations. The earnings in North America successfully reduce the adverse impact of a decline in the European region. The profit came at 54 cents per share compared to the analysts’ expectations of 44 cents. It was excluding certain items. Ryan Brinkman, an analyst said that they expect a positive reaction to the financial results. He rates GT stock as overweight. As per the analysts’ expectation, the company’s stock opened in green even in a weak market.
The performance
Goodyear Tire & Rubber said 1Q revenue decline 10% to $4.02 billion. It was inclusive of reduction of a $393 million that resulted due to currency exchange rates. It was lower than the expectations of $4.09 billion. In North America, the company’s operating income jumped 27% to $198 million. However, the earnings in Europe, Africa and Middle East Africa region declined 34% to $73 million.
The expert view
Richard J. Kramer, the Chairman and CEO of Goodyear Tire & Rubber, said that 1Q indicates solid momentum as the company begins with its operations in 2015. The company faced significant foreign currency problems and posted record earnings driven by North America. It posted fourth consecutive quarter of division with operating income margin of over 10%. The volume growth was supported by market demand for the high-value added products. The overall performance enhances the confidence within among the management for the remained of 2015.
The dividend
Goodyear Tire & Rubber Co (NASDAQ:GT) paid a dividend of 6 cents a share March 2, 2015. The Board has once again announced a quarterly dividend of 6 cents a share that will be paid on June 1, 2015, with record date of May 1, 2015. During the earnings release, the company said that it established its first development site in China.
