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

Executive summary

• Fourth quarter net sales were $4.92 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 transformation delivered $1.5 billion in run rate benefits, with $775 million in SOI benefits in 2025 and $772 million in annual benefits for 2025; further $300 million expected in 2026.

• Strategic focus on high-value segments, product innovation (30% more new products), and increased pricing in response to tariffs drove market share gains in consumer OE in the U.S. and Europe.

• Net income for Q4 was $105 million ($0.36 per share), or $113 million adjusted ($0.39 per share), up from $73 million last year.

• Free cash flow exceeded $1.3 billion in Q4, marking one of the strongest quarters for cash generation in over a decade.

Financial highlights

• Q4 sales were $4.92 billion, down 0.6% year-over-year; tire units sold decreased 3% to 42.3 million.

• Segment operating margin improved to 8.5%, up 0.8 points year-over-year; gross margin rose by 1 point to 20.9%.

• 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.

• Free cash flow for Q4 was $1.34 billion, up $308 million year-over-year; net debt reduced by $1.6 billion year-over-year.

Outlook and guidance

• Q1 2026 global unit volumes expected to decline ~10% due to seasonality and industry headwinds; SOI significantly affected by lower consumer replacement volume and weak commercial truck trends.

• Price/mix expected to be a $25 million benefit 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 benefits of $300 million, tariffs headwind of $175 million, and other costs $120 million.

• SOI base for 2026 is $815 million (ex-insurance, post-divestitures), with organic growth modeled at ~10%.

• Free cash flow expected to be slightly positive for the year, with working capital and interest expense reductions; capital expenditures at $825 million.