The Goodyear Tire & Rubber Company (GT) Q1 2025 earnings summary

Executive summary

• Q1 2025 net income was $115 million, reversing a $57 million loss in Q1 2024, driven by a $260 million gain from the OTR business sale and Goodyear Forward transformation benefits.

• Net sales declined 6.3% year-over-year to $4.3 billion, primarily due to lower global tire volume, foreign exchange impacts, and asset divestitures.

• Goodyear Forward delivered $200 million in Q1 benefits, with a raised annualized run rate target of $1.5 billion and $750 million in segment operating income benefits expected for 2025.

• Completed sale of OTR business and Dunlop brand, generating ~$1.6 billion in gross proceeds, supporting deleveraging and transformation.

• Maintained momentum in premium tire segments, with OE market share gains in the U.S. and EMEA, and strong Cooper brand retail sellout.

Financial highlights

• Segment operating income was $195 million, down from $247 million year-over-year, with a margin of 4.6% versus 5.4% last year.

• Gross margin declined to 17.4% from 18.1% year-over-year.

• Free cash flow was negative, reflecting seasonal working capital outflows; net debt declined pro forma for asset sales.

• Cash and cash equivalents at quarter-end were $902 million.

• Adjusted EPS was ($0.04), down from $0.10 in Q1 2024.

Outlook and guidance

• Goodyear Forward targets reaffirmed: 10% segment operating margin and net leverage under 2.5x by Q4 2025, with $1.3 billion in cost reductions.

• Q2 2025 global tire unit volume expected to decline ~2% due to high U.S. inventories and lower Asia Pacific demand.

• Q2 2025 price/mix benefit of $135 million expected, with raw material costs up $180 million; Goodyear Forward to deliver ~$190 million in Q2.

• Full-year 2025 capital expenditures anticipated at ~$950 million; working capital inflow of ~$50 million.

• Industry demand expected to recover in H2 2025, with consumer and commercial segments ranging from -2% to +2%.