The Goodyear Tire & Rubber Company (GT) Q4 2025 earnings summary

Executive summary

• Fourth quarter net sales were $4.9 billion, flat year-over-year, with segment operating income of $416 million, up 9% year-over-year and 18% organically, marking the highest SOI and margin in over 7 years and strong free cash flow performance.

• Goodyear Forward program delivered $1.5 billion in run rate benefits to date, exceeding initial P&L targets for 2024 and 2025 by over $150 million, with $775 million SOI benefit in 2025 and $300 million expected in 2026.

• Strategic focus on high-value segments, product innovation, and disciplined pricing led to market share gains in consumer OE in both the U.S. and Europe.

• Completed three major asset sales in 2025, including Dunlop, Chemicals, and OTR businesses, significantly improving the balance sheet and reducing net debt by $1.6 billion year-over-year.

• Full-year net sales were $18.3 billion, with a net loss of $1.7 billion due to significant non-cash charges, but adjusted net income was $136 million.

Financial highlights

• Q4 sales were $4.9 billion, down 0.6% year-over-year due to lower volume and divestitures; revenue per tire increased 4%.

• Gross margin rose by 1 point to 20.9%, driven by price/mix and Goodyear Forward; SOI up 9% year-over-year and 18% adjusting for divestitures.

• Free cash flow exceeded $1.3 billion in Q4, up $308 million year-over-year; net debt declined $1.6 billion versus prior year.

• Adjusted non-GAAP EPS was $0.39, excluding a $56 million insurance claim settlement.

• Net income for Q4 was $105 million, up 43.8% year-over-year.

Outlook and guidance

• Q1 2026 SOI expected to be significantly impacted by lower consumer replacement volume, fixed cost carryover, and weak commercial truck trends; global unit volumes projected down ~10%.

• Price/mix expected to benefit $25 million in Q1; raw materials a $85 million benefit; tariffs and other costs a $130 million headwind.

• Full year 2026: raw materials benefit of $300 million, Goodyear Forward to drive $300 million in savings, tariffs a $175 million headwind.

• SOI base for 2026 is $815 million after divestitures, with organic growth modeled at ~10%.

• Free cash flow expected to be slightly positive for the year, with improvements in working capital and lower CapEx and interest expense.

• Full-year 2026 interest expense expected at $400–$425 million; capital expenditures at $825 million.