SOURCE: Rothman Research

Rothman Research

April 20, 2010 09:08 ET

How About Tire Stocks...

JOHANNESBURG, SOUTH AFRICA--(Marketwire - April 20, 2010) - www.rothmanresearch.com -- Closely tied to the auto industry, tire makers experienced the recession as their tires would feel the friction of a 150 mile drive on jagged terrain; they simply kiss the dirt as automakers in the U.S. went begging for bail-out money. 2008 was particularly painful for the industry as consumer spending went downhill impacting demand for tires both from the automakers who experienced a spiraling drop in car sales and from the populace who were on 'no-spending' mode. As the dynamics of falling demand was to be met with adjusted supply and pricing, a number of tire makers had to make difficult cost-management decisions which led to plant and facility closures. Cooper Tire & Rubber Co. (NYSE: CTB) had to shut down its facility in Albany, Georgia.

*Direct & free downloadable report on Cooper Tire & Rubber Co. is available by signing up now at http://www.rothmanresearch.com/article/ctb/23452/Apr-20-2010.html 

However, all was not lost for those companies in the tire business that boarded the Chinese Auto Industry locomotive before the recession; one company that was successful in this venture is Cooper Tire which had increased its presence in China in 2006 and reaped its rewards throughout 2009 when many of its peers were in the red. "China is now regarded as the top auto manufacturing industry in the world and as an emerging market demand for cars is on an uptrend. We have seen Cooper Tire's continued efforts to enhance its stake in China not later than March of this year. The company had delivered improved fourth quarter results for 2009, and is due to release its first quarter 2010 results pre-market on May 5th. We believe that the company is going to deliver positive readings for this quarter based on its recent outlook and the fresh gains in auto sales in the U.S.," commented Jack Benassi of www.rothmanresearch.com. "As the American auto industry starts to rebound we are also seeing recovery in the auto suppliers space. Goodyear Tire and Rubber Co. (NYSE: GT), U.S.'s largest tire-maker, has indicated this trend in its last fourth quarter release with a quarterly profit of $107 million as compared to the $330 million loss it incurred in the same quarter for 2008."

*Complimentary downloadable research on Goodyear Tire & Rubber Co. is accessible upon registration at http://www.rothmanresearch.com/article/gt/23451/Apr-20-2010.html

The invention of the wheels was a phenomenal breakthrough in human history, and the tire industry is not going to find it different even if economic environments have been particularly tough in the last two years. People are always going to need tires even if new car demand goes down. The only fear is if we move closer to fiction and cars start to hover, but until then tires are ruling the roads.

www.rothmanresearch.com is a source for investors seeking free information on the Rubber & Plastics industry; investors are encouraged to sign up for free at http://www.rothmanresearch.com/index.php?id=6&name=Register.

Goodyear Tire & Rubber Co. will be releasing its first quarter 2010 results on April 28th.

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