Goodyear Tire & Rubber Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of  Goodyear Tire & Rubber (NYSE: GT  ) rose more than 10% in early trading after CFO Darren Wells gave investors hope for its first profitable year since 2007.

So what: Wells told the audience at the J.P. Morgan Auto conference in Detroit that Goodyear was successfully offsetting rising raw-materials costs with a strategy of targeted pricing and marketing of higher-priced tires, The Associated Press reported.

Now what: Color me surprised that investors were surprised by this news. Just two weeks ago, Goodyear reported blowout second-quarter earnings, thanks in part to a much higher gross margin. Signs were already pointing to tight cost controls -- Wells merely reaffirmed what we already knew. Do you agree? Disagree? Weigh in using the comments box below.

Interested in more info on Goodyear Tire & Rubber?Add it to your watchlist.

Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

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  • Report this Comment On August 13, 2011, at 10:06 PM, ppolka wrote:

    Please correct the title. The share didn't plunge, it popped!

  • Report this Comment On August 15, 2011, at 11:34 AM, gembuyer wrote:

    GT got hammered with the panic of the House Republicans making an emergency out of the debt celing and problems in Europe.

    They have corrected many internal problems, reported good earnings and should have risen 2 - 3 % instead of falling 30% due to the market panic.

    Retracement of 50% of the fall, to about $15 should be short term. Further gains slower but I see stabilization of the stock in the low $19/share range.

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