Goodyear Tire & Rubber NASDAQ: GT reported fourth-quarter 2025 revenue of $4.9 billion and segment operating income (SOI) of $416 million, as management highlighted continued sequential improvement in earnings and margins across geographies despite what it described as a “very challenging” industry environment. CEO Mark Stewart said the quarter produced the company’s highest SOI and SOI margin in more than seven years and that free cash flow was “one of the strongest on record.”
Stewart also pointed to progress under the company’s Goodyear Forward transformation program, including $1.5 billion of run-rate benefits delivered to date. He said Goodyear increased its focus on higher-value segments, launched 30% more new products than any prior year, and completed three major asset sales in 2025 that helped “return the balance sheet to a position of health.”
Fourth-quarter results and key drivers
CFO Christina Zamarro said fourth-quarter sales declined 0.6% from the prior year due to lower volume and the sale of the OTR and chemicals businesses. Revenue per tire rose 4% in the quarter, driven by an 8% increase in consumer replacement, while total unit volume declined 3% primarily due to consumer replacement. Americas commercial volume fell 14% amid continued weakness, while consumer OE volume increased 2% on share gains in EMEA.
Gross margin expanded by 1 percentage point, which Zamarro attributed to price/mix and Goodyear Forward execution. SOI of $416 million was up about 9% year over year and up 18% when adjusting for divestitures. SOI margin was 8.5% and up 1 point excluding asset sales.
SOI included a $56 million benefit tied to a business interruption insurance settlement, which Goodyear excluded from adjusted earnings per share. After adjusting for that and other significant items, the company reported non-GAAP EPS of $0.39. Zamarro noted Goodyear also received $52 million of insurance proceeds in the fourth quarter of 2024.
In the SOI bridge discussed on the call, management cited:
- A $92 million headwind from lower tire unit volume and factory utilization
- A $206 million benefit from price/mix, with contributions from all regions
- A $9 million headwind from raw materials
- A $227 million headwind from inflation, tariffs, and other costs
- A $192 million quarterly benefit from Goodyear Forward (with $772 million for the full year)
Zamarro said Goodyear exceeded its initial P&L targets for 2024 and 2025 by more than $150 million.
Free cash flow and balance sheet
Goodyear generated more than $1.3 billion in free cash flow during the quarter, which management said, along with divestiture proceeds, contributed to a $1.6 billion reduction in net debt versus a year ago. Zamarro said the reduction reflected net asset-sale proceeds and was partially offset by cash restructuring and currency translation effects on debt.
Regional performance: Americas, EMEA, and Asia Pacific
Americas: Stewart said the U.S. consumer replacement market remained volatile, with U.S. consumer sell-out declining even as vehicle miles traveled stayed positive. He pointed to increased discounting and promotional activity late in the year, which contributed to elevated channel inventories. In January, he said industry sell-out was “materially weaker” than the fourth quarter, down about 5% across the industry, citing storms, frigid temperatures, and consumers extending tire life.
Zamarro said Americas unit volume fell 4% on lower U.S. consumer replacement, and she cited fourth-quarter industry data including retail sell-out down 2.5%. Americas SOI was $233 million, or just over 8% of sales.
EMEA: Stewart described softening sell-in trends in consumer replacement as the region anticipated EU duties on Chinese tires, while the timeline for a decision on anti-dumping tariffs has been pushed to midyear. He said Goodyear’s consumer OE volumes continued to gain share, with roughly 3 percentage points of share growth and an eighth consecutive quarter of gains. Zamarro reported EMEA unit volume declined 2% and SOI was $114 million (7.5% of sales). The increase versus last year included the insurance recovery; excluding insurance, Zamarro said SOI increased $20 million and margin expanded 120 basis points.
Asia Pacific: Stewart said performance strengthened with meaningful SOI margin growth, helped by actions focused on improving margin. After SKU rationalization, consumer replacement returned to growth, though consumer OE volume remained a headwind in 2025 due to China incentives skewing toward lower price-point vehicles. Zamarro reported Asia Pacific unit volume declined 2% and SOI was $69 million, or 13.1% of sales. Excluding the OTR sale, she said Asia Pacific SOI increased $16 million and margin expanded 330 basis points.
First-quarter outlook: volume pressure, overhead headwinds, and cost/tariff items
Looking ahead, management said first-quarter 2026 results would be “significantly affected” by lower consumer replacement volume, fixed-cost carryover from 2025, and continued weak commercial truck trends. Zamarro said Goodyear expects first-quarter volume to be down about 10%, driven by U.S. consumer replacement, with unabsorbed overhead a $60 million headwind. She said the company reduced production by 4 million units in the fourth quarter to manage inventory and expects similar impacts into the second and third quarters as production is aligned with demand.
For the first quarter, management outlined the following major items:
- Price/mix benefit of about $25 million
- Raw material benefit of about $85 million (with a $300 million full-year benefit at current spot rates)
- Goodyear Forward benefit of about $100 million in Q1 and about $300 million for the full year
- Tariffs and other costs headwind of about $130 million in Q1 (including about $65 million of tariffs)
Goodyear also said divestitures will reduce the base of earnings by $37 million in the first quarter and $185 million for the full year. In addition, the company expects to amortize $55 million of deferred revenue in 2026 related to supply agreements from three asset sales.
In Q&A, Zamarro said U.S. channel inventories were estimated to be up about 10% year over year at year-end, driven by pre-buying of imports and year-end promotional activity, and that Goodyear’s assumptions include most of that inventory declining in the first quarter with some flow-through into the second quarter. She also said the company expects only slightly positive free cash flow in a base case for 2026, citing improvements in restructuring cash outflows, working capital inflows, and reduced interest expense.
Goodyear Forward and longer-term targets
Stewart said Goodyear Forward has reached its two-year conclusion but that the company intends to continue applying the program’s operating discipline. Management reiterated it has “not backed off” Goodyear Forward targets, including an overarching 10% SOI margin objective that Stewart said has been pushed out in timing due in part to the commercial downturn.
On potential additional restructuring, Stewart said management is not “rolling out a big restructuring 2.0” and described the current focus as continued execution through manufacturing, procurement, engineering, and other cost-efficiency projects.
On Europe tariffs, Stewart said anticipated anti-dumping duties on Chinese consumer tires are expected to be between 41% and 104%, with a decision now expected in July 2026. He also referenced an EU anti-subsidy investigation expected to conclude by the end of the year.
About Goodyear Tire & Rubber NASDAQ: GT
The Goodyear Tire & Rubber Company is a leading tire manufacturer and rubber products supplier with more than a century of innovation in its portfolio. Founded in 1898 by Frank Seiberling in Akron, Ohio, the company has grown into a global enterprise known for its engineering expertise and quality standards. Over its history, Goodyear has pioneered advances in tire technology, from early pneumatic designs to modern high-performance and fuel-efficient solutions.
Goodyear’s core business encompasses the design, production and distribution of tires for a variety of markets, including passenger cars, commercial trucks, off-the-road vehicles, aircraft and specialty applications.
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