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GOODYEAR TIRE & RUBBER CO /OH/ (GT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 net sales were $4.65B and total tire units were 40.0M; adjusted EPS was $0.28, while GAAP EPS was $(7.62) driven by a $1.4B deferred tax asset valuation allowance and a $674M goodwill impairment; total segment operating income (SOI) was $287M and segment margin 6.2% .
  • Versus consensus, GT delivered an adjusted EPS beat ($0.28 vs $0.15*), revenue in-line/slight beat ($4.65B vs $4.64B*), but an EBITDA miss ($347M vs $430M*) as tariffs, inefficiencies and lower volumes weighed on profitability . Estimates marked with * are from S&P Global.
  • Management completed all planned divestitures (OTR, Dunlop, Chemical) with total gross proceeds of ~$2.2B, enabling significant deleveraging and portfolio focus; Chemical sale proceeds of ~$580M were received at closing (subject to adjustments) .
  • Q4 outlook: meaningful sequential SOI increase to ~$370–$375M, with price/mix +$135M, Goodyear Forward benefits ~$180M, and slight raw material tailwind offset by inflation/tariffs/other of ~$190M (tariffs ~$80M); global volume expected down ~4% and production ~4M units lower vs last year . Key stock catalysts: Q4 SOI step-up, deleveraging progress, tariff-driven price/mix uplift vs import normalization .

What Went Well and What Went Wrong

  • What Went Well

    • Completed all planned divestitures, achieving ~$2.2B gross proceeds to reduce debt and streamline the portfolio (OTR, Dunlop, Chemical) .
    • Goodyear Forward delivered $185M of quarterly benefits; management expects to exit 2025 at a ~$1.5B run-rate benefit, supporting sequential margin expansion .
    • Strong OEM share gains continued: Americas consumer OE +4% units and EMEA OE +18.7% units; EMEA returned to profitability with SOI $30M (+$7M YoY) . Management: “We achieved meaningful sequential earnings and margin expansion driven by…Goodyear Forward” .

  • What Went Wrong

    • Volume pressure: global units down 6% YoY; Americas replacement down 8.1% on elevated channel inventories of low-end imports; Asia Pac units -9.2% on OTR sale and demand weakness .
    • Profitability headwinds: inflation/other costs of $137M including ~$40M tariffs, ~$25M inefficiencies (factory closures/lower production), ~$20M higher freight/warehouse; raw materials headwind ~$81M .
    • Significant non-cash charges: $1.4B deferred tax asset valuation allowance and $674M goodwill impairment drove GAAP net loss of $(2.2)B . Analysts flagged ongoing commercial weakness and import gluts pushing normalization into 2026 .

Financial Results

Performance vs prior year and prior quarter

MetricQ3 2024Q2 2025Q3 2025
Revenue ($)$4,824M $4,465M $4,645M
Adjusted EPS ($)$0.36 $(0.17) $0.28
GAAP EPS ($)$(0.13) $0.87 $(7.62)
Total Tire Units (M)—37.9 40.0
Total Segment Operating Income ($)$346M $159M $287M
Total Segment Operating Margin (%)7.2% 3.6% 6.2%

Consensus vs actual (Q3 2025)

MetricConsensus*ActualOutcome
Revenue ($)$4,642.7M*$4,645M In-line/Beat
Adjusted EPS ($)$0.15*$0.28 Beat
EBITDA ($)$429.6M*$347M [functions.GetEstimates]Miss

Estimates marked with * are from S&P Global.

Segment breakdown (Q3 2025 vs Q3 2024)

RegionTire Units (M)Net Sales ($M)Segment Operating Income ($M)Segment Margin (%)
Americas (2025 vs 2024)19.6 vs 21.0 $2,737 vs $2,858 $206 vs $251 7.5% vs 8.8%
EMEA (2025 vs 2024)12.0 vs 12.2 $1,407 vs $1,348 $30 vs $23 2.1% vs 1.7%
Asia Pacific (2025 vs 2024)8.4 vs 9.3 $501 vs $618 $51 vs $72 10.2% vs 11.7%

Operational KPIs and drivers (Q3 2025)

KPIQ3 2025
Goodyear Forward benefit+$185M
Inflation & other costs$(137)M (incl. tariffs ~$40M; inefficiencies ~$25M; transport/warehousing ~$20M)
Raw materials impact$(81)M
Price/mix impact+$100M
Volume impact$(90)M
Non-recurrence of 2024 insurance$(17)M
OTR business sale SOI impact$(10)M

Non-GAAP reconciliation (Q3 2025): Adjusted net income $82M; adjusted EPS $0.28; GAAP net loss $(2.195)B due to $1.4B tax valuation allowance and $674M goodwill impairment .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Segment Operating Margin targetQ4 202510% SOI margin; leverage 2.0x–2.5x by Q4 2025 Q4 SOI ~$370–$375M; EBITDA FY25 ~ $1.8B; operating FCF ~ breakeven with ~$200M asset-sale proceeds flowing through OCF Shift to explicit Q4 SOI/EBITDA; leverage update not reiterated this call
Price/mixQ3–Q4 2025+$150M per quarter (bridge) Q4 +$135M Slightly lower
Raw materialsQ4 2025Tailwind ~$25M Slight benefit Consistent direction
Goodyear ForwardQ4 2025+$175M +$180M Raised
Inflation/tariffs/otherQ4 2025~$175M headwind ~$190M headwind; tariffs ~$80M in Q4 Higher
Global volumeQ4 20252H volume about flat (prior framework) ~4% down YoY; production ~4M units lower vs LY Lower
Tariffs (annualized)2025–2026~$300M; Q3 step-up/Q4 similar ~$300M annual run-rate; Canada tariff relief lowers by ~$50M; 2026 carryover $150–$160M (weighted 1H) Canada relief; 2026 quantified
2026 SOI drivers (select)2026—Goodyear Forward carryover ≥$250M; ROS tailwind ~$200M; tariff carryover $150–$160M; Chemical sale headwind ~$120M total (SOI ~$45M), stranded OH ~$15M; amortization of $370M agreements ~$60M 2026 bridge detailed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Tariffs & importsU.S. consumer tariffs drive price actions; imports surged; EU investigating 41%-104% tariffs; annualized tariff cost ~$300M Q3 tariffs ~$40M; Q4 tariffs ~$80M; annualized ~$300M; Canada removed tariffs on US imports; EU pre-buy ahead of potential retroactive tariffs Stabilizing U.S. import growth; Europe lagged impact; mitigation ongoing
OEM share gainsStrong OE share gains in U.S. and EMEA; focus on >18” rim sizes Americas OE +4%; EMEA OE +18.7%; 7th consecutive quarter of OE share gains in both regions Continuing strength
Consumer replacementU.S. low-end imports outperformed; channel filled; outlook challenging U.S. replacement down on elevated inventories; digestion expected through Q4; EMEA replacement down on pre-buy Gradual normalization into Q4/Q1’26
Commercial truckWeakness; lowest earnings level in years expected; JV Vietnam/retread tariffs noted Remains weak; U.S. builds down >30%; import growth into U.S. commercial Prolonged softness; recovery 2026
Portfolio actionsOTR and Dunlop sales closed; Chemicals under review Chemical sale closed 10/31; all divestitures complete; proceeds for deleveraging Deleveraging catalyst realized
Product/retailExpand premium SKUs (Eagle F1, 18”+); retail modernization New AT lines (Wrangler Outbound/Workhorse/Electric Drive) and Eagle F1 all-season; expand storefronts Mix upgrade supports margin

Management Commentary

  • “We delivered a meaningful increase in segment operating income relative to the second quarter…in an industry environment…marked by global trade disruption.” — Mark Stewart, CEO .
  • “Goodyear Forward contributed $185 million of benefit during the quarter…Inflation and other costs were a headwind of $137 million…tariffs ~$40 million.” — Christina Zamarro, CFO .
  • “With the sale of our Chemical business, we have completed all of the planned asset sales…total gross proceeds…approximately $2.2 billion.” — Mark Stewart, CEO .
  • “Based on rates in effect today, our annualized tariff costs are expected to be approximately $300 million.” — Christina Zamarro, CFO .

Q&A Highlights

  • OE share gains durability: Management emphasized continued wins on premium fitments, USMCA-compliant sourcing tailwinds, and seven straight quarters of OE share gains in Americas and EMEA .
  • Channel inventory digestion: U.S. consumer replacement excess likely to clear through Q4; commercial pre-buy digestion may extend into Q1’26 .
  • Commercial environment: OEM builds down >30% in U.S.; margin pressure persists amid regulatory uncertainty; focus on premium fleet and “tires-as-a-service” .
  • Q4 and 2026 bridges: Q4 SOI ~$370–$375M; 2026 tailwinds include ≥$250M Goodyear Forward carryover, $200M ROS benefit; tariff carryover $150–$160M partially offset by Chemical sale headwind ($120M total) and ~$60M amortization benefit .
  • Tariff mitigation: Active policy engagement (U.S./EU), manufacturing footprint optimization, and sourcing shifts to manage landed cost .

Estimates Context

  • Q3 2025 vs consensus: Adjusted EPS $0.28 vs $0.15* (beat); revenue $4.65B vs $4.64B* (in-line/beat); EBITDA $347M vs $430M* (miss) . Estimates marked with * are from S&P Global.
  • Implications: Street likely raises near-term EPS on Q4 SOI guidance and Goodyear Forward cadence, but trims EBITDA on tariff/inefficiency costs and volume softness; 2026 bridges provide visibility to cost tailwinds but also include divestiture and tariff carryover offsets .

Key Takeaways for Investors

  • Sequential improvement with EPS/revenue beats, but EBITDA miss underscores cost and volume headwinds; focus on Q4 SOI step-up (~$370–$375M) as near-term catalyst .
  • Portfolio simplification/deleveraging largely de-risked after completing divestitures (~$2.2B gross proceeds), supporting balance sheet health into 2026 .
  • Tariffs a double-edged sword: near-term cost pressure (~$300M annualized) but structural price/mix opportunity vs importers; normalization of import pre-buy is a key watch item for 2026 .
  • Mix and share story intact: premium SKU launches, retail upgrades, and sustained OE share gains in Americas/EMEA provide medium-term margin levers .
  • Near-term trading setup: positive into Q4 on guided SOI/FCF dynamics and deleveraging prints; risks include slower channel normalization, commercial truck weakness, and lingering inefficiencies/tariffs .
  • 2026 bridge offers visibility (Goodyear Forward ≥$250M, ROS ~$200M), partly offset by tariff carryover and Chemical sale headwind; net suggests scope for EBITDA/FCF improvement as volumes normalize .

Notes:

  • All estimates marked with * are values retrieved from S&P Global.
  • The company noted a revision of prior-period financials for a non-material Turkey currency remeasurement error (see 10-Q reference in disclosures) .