Goodyear's 2Q Earnings Beat And Operational Progress Amid Industry And European Headwinds

Goodyear Tire & Rubber Company's (GT) 2Q earnings results beat analyst estimates and led to a 10.4% gain in the stock. In 2Q Goodyear faced difficult industry conditions and its tire volumes declined. Its European business was especially challenged and may face continued pressure. Despite the challenges in North America, Goodyear continued to make progress with its strategy roadmap. Goodyear's stock price is down year-to-date and is trading near the bottom of a multi-year trading range. With continued headwinds from consumer demand, especially in Europe, Goodyear may have a challenging 2H 2012. However, at some point people need to replace their tires and Goodyear's business transformation will likely boost results when the cycle starts to tick up. In this article we give an overview of Goodyear's business, examine the 2Q 2012 results, look at the valuation and a comparable company analysis and present our conclusions for investing in the stock.

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