Goodyear Results Contain ‘Surprises’

Although Goodyear’s earnings were roughly as expected Goodyear’s recent positive results contained some surprises, Deutsche Bank analysts have reported. Despite 4 per cent growth in unit sales and an 8 per cent increase in average transaction prices, Goodyear was only marginally profitable in its North American tyre division in the fourth quarter, say the analysts. “We have doubts about Goodyear Tires’ ability to cut costs, increase volume, or improve variable margins in this region. In fact, there was evidence that cost cutting is losing steam,” they said adding: “Our model suggests that first half EPS will be close to breakeven. Improvement in the second half requires significant ramp up of cost savings.”