Goodyear Tire & Rubber Co. (GT:US), the largest U.S. tiremaker, rose the most in almost a year after posting second-quarter earnings that beat analysts’ estimates.
Shares of the Akron, Ohio-based manufacturer climbed 8.9 percent to $18.56 in New York, the biggest one-day gain since July 31, 2012 and highest closing price since May 2011. The company has gained 34 percent this year, compared with an 18 percent increase in the Standard & Poor’s 500 Index.
Goodyear reported second-quarter net income of $188 million, more than double the $92 million reported in the year-earlier period and a company record for the quarter. Profit per share, excluding one-time items, was 76 cents, exceeding the 48-cent average of seven analysts’ estimates. The company had record operating profit in North America and Asia.
The tiremaker posted “the highest-quality beat we’ve seen from Goodyear in a long time,” Itay Michaeli, an analyst with Citigroup Inc. who rates the shares a buy, wrote in a report. “Our initial view is that Goodyear delivered on all fronts, and then some.”
Goodyear’s North American unit had operating income of $204 million, an 8.5 percent increase from a year earlier while revenue declined 10 percent and tire shipments slid 3.9 percent. The unit benefited from lower raw material costs and other expenses, according to the statement. The Asia unit’s operating income surged 28 percent to $91 million.
“The steady delivery of improved results in North America has been remarkable in such a low-volume environment,” Chief Financial Officer Darren Wells said on a conference call.
The company forecast annual global operating income of $1.5 billion, at the high end of its prior projection of $1.4 billion to $1.5 billion.
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