I am holding my core position with no hedges going into earnings. Sold my swing trade (cost 10.12/share) on $2 move up after last earnings.
That being said: spot rubber was down on average 8% this quarter. Butadiene was down around 3% for quarter. Oil was up. I think they got more savings on commodity costs than they guided last quarter. If you think N.A. sales were good, auto sales were good, replacement tire sales were good, and the inventory control in Europe had an effect, then if I was buying here (and I am NOT), I would buy on any dips this week with a .25-.30 mental/real stop loss. At this price it would be $12.
The one thing this stock has going for it on earnings report is that the analysts do not seem to bother to update their EPS targets - due to being a small mid-cap stock. After the last report - analysts dropped estimates for qtr3 frm .73 to .60. It is now at .59. This despite a big Goldman upgrade. I am expecting a report in the .65-.69 range on slightly lower revenues. Guidance will be critical. Rubber took another tumble yesterday to 1.31+, but that is for next quarter. Remember, GT has to rebate some cost savings to commercial accounts/fleet sales, but no rebates to retail dealers.
Personally, I would be surprised at anything more than a .75-1.00 pop on good news and back to 11 lows if the analysts do not like the conference call. So as always - it is your money - your call. My cost basis is low 7's so I am just waiting for QE3 effect to really take hold. Plan to be out by end of year one way or the other.
Well, dead wrong on this one. By far my worst prediction, and in this earnings season the worst report of any stock I own. The only bright spot was the guidance for a 10% decline in raw material costs for qtr4. Back to the drawing board :(