AKRON (May 1) — Goodyear´s stock price cooled a bit April 30 after it surged 5.9 percent April 27 following the tire maker´s latest financial report.
The company reported a $174 million net loss in the first quarter yet increased its cost-cutting goal to $2 billion by 2009.
Goodyear´s stock price rose to $34.41 on April 27 on heavy trading volume. It fell back 3.3 percent April 30 to $33.26.
Analysts also responded favorably to the Akron-based tire maker´s cost-cutting plans, which include savings in continuous improvement such as Six Sigma and lean manufacturing, reductions in Goodyear´s manufacturing footprint and potential plant closures, reduced selling, administrative and general expenses and increased Asian sourcing.
As part of the recent contract with the United Steelworkers, 11 of the 12 master contract plants in the U.S. have protected status until July 2009. The plant in Tyler, Texas, is slated to close after the end of this year.
Jonathan Steinmetz of Morgan Stanley retained his "equal weight" rating, writing to investors that Goodyear "has done all the right things to counter (North American) weakness and has strong business internationally."
Steinmetz also praised the company´s reduction of its expected strike recovery cost. Goodyear expected last year´s strike to cost it $200 million to $230 million this year, but management now expects costs of $100 million to $120 million.