Goodyear Tire & Rubber Co (GT) Q2 2025 Earnings Call Highlights: Navigating Industry …

  • Revenue: $4.5 billion, down 2% from last year.

  • Unit Volume: Declined 5%.

  • Gross Margin: Declined 360 basis points.

  • SG&A Costs: Lower by $39 million.

  • Segment Operating Income: $159 million.

  • Net Income: Increased to $254 million, driven by a gain on the sale of the Dunlop brand.

  • Loss Per Share: Adjusted loss per share was $0.17.

  • Free Cash Flow: Includes benefits of $191 million in the quarter from asset sales.

  • Net Debt: Declined over $600 million.

  • Americas Unit Volume: Decreased 2.6%.

  • Americas Segment Operating Income: $141 million, a decrease of $100 million compared to last year.

  • EMEA Unit Volume: Decreased 2%.

  • EMEA Segment Operating Income: Loss of $25 million.

  • Asia Pacific Unit Volume: Decreased 16%.

  • Asia Pacific Segment Operating Income: $43 million, with SOI margin growing 150 basis points.

Release Date: August 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

  • Goodyear Tire & Rubber Co (NASDAQ:GT) has executed consistently on its Goodyear Forward initiative, achieving P&L benefits ahead of schedule.

  • The company has increased pricing in the US and Canada in response to tariffs, which has been effective in maintaining price-mix benefits.

  • Goodyear has expanded its margins in the Asia Pacific region and reduced SG&A costs.

  • The company is on track to deliver a strong balance sheet by the end of the year, supported by three divestitures.

  • Goodyear is introducing new premium products, such as the Eagle F1 Asymmetric six and Assurance MaxLife two, to drive organic growth and improve its product mix.

  • Goodyear’s second-quarter results were below expectations due to unprecedented industry disruption and global trade changes.

  • The consumer OE industry contracted more than anticipated in both the Americas and Europe, impacting volume.

  • There is increased competition in the consumer replacement market, particularly in the Americas and EMEA, affecting volume.

  • The truck tire market is experiencing recessionary levels, with significant volume declines expected to continue.

  • Tariff costs are increasing, with annualized costs expected to rise to $350 million, impacting the company’s cost structure.

Q: Could you elaborate on the impact of low-cost imports on your key markets, particularly outside the US, and clarify the timeline of the Section 232 tariffs? A: Christina Zamarro, Executive Vice President and CFO, explained that imports surged across key markets, including the US and Europe, rather than being redirected. The Section 232 tariffs for tires took effect in early May, and the significant increase in imports is partly due to the time it takes for tires to arrive from Southeast Asia. The expectation is that imports will decline in the US by the third quarter, while Europe may face additional tariffs due to ongoing investigations.

Q: Can you provide insights into the price versus mix dynamics, and how do you see this evolving? A: Christina Zamarro noted that recent price increases are effective, but commercial truck mix has been a headwind. The demand in the US has been skewed towards lower-end products due to price inflation speculation. Seasonal mix improvements are expected in the fourth quarter, and new product launches in larger rim sizes should drive a richer mix.

Q: What are the main components of the $74 million in other costs, and should we expect similar impacts in future quarters? A: Christina Zamarro clarified that the increase is due to annualized inflation, new tariff costs, and manufacturing inefficiencies from ramping down factories. These costs are expected to continue, with tariffs contributing $60 million in Q3 and $70-$80 million in Q4.

Q: How are you addressing the commercial vehicle headwinds, and what is the outlook for this segment? A: Christina Zamarro indicated that the commercial truck profit contribution is significant, and the company expects additional unabsorbed costs in the second half. New tariffs from Brazil and Vietnam will also increase costs. Adjustments in production are being made to align with demand.

Q: With the wind down of the Cooper brand’s relationship with ATD, what impact did this have on volumes, and when do you expect resolution? A: Mark Stewart, CEO, explained that the decision to exit ATD was strategic, focusing on aligned distributors. By the end of July, 95% of the retail base had transitioned to new distributors. The impact on volumes was minimal, as ATD represented less than 5% of consumer replacement volumes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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