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

Executive summary

• Q3 2024 segment operating income was $347 million (7.2% margin), up year-over-year for the fourth consecutive quarter, with margin expansion driven by Goodyear Forward plan benefits.

• Net sales declined 6.2% year-over-year to $4,824 million, primarily due to lower global tire volume and negative FX impact.

• Net loss for Q3 2024 was $34 million, improved from $89 million loss in Q3 2023, reflecting lower rationalization charges and higher SOI, offset by a $125 million intangible asset impairment.

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

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

Financial highlights

• Q3 2024 net sales were $4.8 billion, down 6% year-over-year; tire unit volume was 42.5 million, down 6.2%.

• Adjusted EPS was $0.37 in Q3 2024; net loss included $125 million intangible asset impairment and $25 million Goodyear Forward costs.

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

• Net debt at September 30, 2024, was $8,123 million, up from $7,664 million a year earlier.

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

Outlook and guidance

• Goodyear Forward plan targets $1.5 billion in gross annual run-rate benefits by Q4 2025, with $450 million in 2024 and $750 million in 2025.

• SOI margin target of 10% by Q4 2025; net leverage targeted at 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.

• Raw material costs expected to rise $100 million in Q4 and $300 million in 1H 2025; inflation and other costs to be a $35 million headwind.

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