The Goodyear Tire & Rubber Company (GT) Q3 2024 earnings summary

Executive summary

• Q3 2024 segment operating income reached $347 million with a 7.2% margin, marking the fourth consecutive quarter of margin expansion, while net sales declined 6.2% year-over-year to $4.8 billion and net loss narrowed to $34 million, driven by Goodyear Forward plan benefits and cost actions.

• Adjusted net income was $105 million ($0.37 per share), reflecting significant one-time items including a $125 million intangible asset impairment and $25 million Goodyear Forward costs.

• Goodyear Forward transformation plan targets increased to $1.5 billion gross run-rate gains by end of 2025, with $450 million gross benefits expected in 2024 and $750 million in 2025.

• Portfolio optimization is ongoing, with expected gross proceeds in excess of $2 billion and reaffirmed net leverage target of 2.0x–2.5x by end of 2025.

• U.S. retail business delivered its best performance in over 15 years, with significant earnings growth and expanded fleet customer base.

Financial highlights

• Q3 2024 net sales were $4,824 million, down 6.2% year-over-year, with tire unit volumes at 42.5 million; segment operating income was $347 million (7.2% margin), and adjusted EPS was $0.37.

• Net debt at quarter-end was $8,123 million, up from $7,664 million a year earlier, mainly due to higher working capital.

• Free cash flow was negative $340 million in Q3 2024, a decline from negative $41 million in Q3 2023.

• Year-to-date segment operating income was $933 million (6.7% margin), up from $585 million (3.9% margin) YTD 2023.

• Cash and cash equivalents at September 30, 2024, were $905 million; unused credit availability was $2,508 million.

Outlook and guidance

• Goodyear Forward benefits guidance for 2024 raised to $450 million, with $750 million in additional benefits expected in 2025 and a gross annual run-rate target of $1.5 billion by end of 2025.

• SOI margin target of 10% and net leverage target of 2.0x–2.5x by Q4 2025.

• Q4 2024 global tire unit volume expected to decline ~4% year-over-year due to weak industry trends and high inventories of low-end imports.

• Raw material costs projected to rise by $100 million in Q4 and $300 million in H1 2025.

• CapEx for 2025 to trend below $1 billion, down from $1.25 billion, reflecting disciplined capital allocation.