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GOODYEAR TIRE & RUBBER CO /OH/ (GT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered $4.95B revenue, GAAP EPS $0.26, and adjusted EPS $0.39; segment operating income (SOI) was $385M with 7.8% margin, aided by $195M Goodyear Forward benefits and $52M insurance proceeds, partially offset by negative price/mix vs raw materials and lower volume .
  • Management reaffirmed expanded Goodyear Forward targets (run-rate $1.5B by end-2025; 10% SOI margin by Q4 2025; net leverage 2.0x–2.5x by end-2025) and detailed 2025 glidepath: H1 SOI down on raw material headwinds (~$350M in H1), H2 recovery on price/mix and Forward savings; consulting costs -$80M y/y; OTR sale reduces 2025 SOI by ~$80M (incl. stranded costs) .
  • Balance sheet de-risking: OTR divestiture closed Feb 3 for ~$905M; proceeds earmarked for debt reduction; Dunlop brand sale expected mid-2025 for ~$700M; company intends to repay $500M 9.5% notes and targets ~$70M annual interest savings; pro forma year-end net debt ~$6.1B (3.0x net leverage) post-OTR .
  • Industry mix and tariff dynamics remain pivotal: low-end import share rose in the U.S., pressuring consumer replacement; management is engaging policymakers and modernizing U.S. manufacturing (Oklahoma capacity +~10M premium units across 2025–2026) to defend premium mix and margins .
  • Wall Street S&P Global consensus revenue/EPS for Q4 2024 was unavailable via our feed at this time; therefore beat/miss vs estimates cannot be stated. We will update when S&P Global data is accessible.

What Went Well and What Went Wrong

  • What Went Well

    • Sustained margin progress: SOI margin reached 7.8% in Q4 (vs 7.5% LY; 7.2% in Q3), with total SOI +$2M y/y despite volume/mix headwinds, driven by $195M Forward benefits and $52M insurance proceeds .
    • EMEA and APAC execution: EMEA SOI rose to $41M (2.8% margin) on winter demand and Forward benefits; APAC SOI rose to $82M (13.5% margin) despite volume declines, reflecting strong manufacturing/pricing and fresh products (notably EV fitments) .
    • Cash generation and deleveraging: Q4 cash from operations was ~$1.3B; post-OTR, pro forma net debt ~$6.1B (3.0x), with planned $500M bond repayment and $70M interest savings; Dunlop sale proceeds ($700M) targeted to further reduce leverage in 2025 .

  • What Went Wrong

    • Revenue and mix pressure: Sales fell 3% y/y to $4.95B, with negative price/mix vs raw materials (-$149M Q4) and lower volumes (-$42M) driven by U.S. low-end import share gains and weaker commercial replacement; Q/Q mix was also unfavorable given higher consumer OE and lower commercial replacement .
    • Americas softness: Americas SOI declined $47M y/y to $262M (9.1% margin) on lower volume and unfavorable price/mix vs raw material costs, despite Forward savings and $52M insurance recoveries .
    • Near-term outlook headwinds: Management guided to H1 2025 SOI down on raw materials (+~$350M in H1; +$175M in Q1) and lower volumes; additional Q1 drags include ~$25M unabsorbed fixed costs and FX (-$15M) .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$5.12 $4.82 $4.95
GAAP EPS ($)$(1.02) $(0.12) $0.26
Adjusted EPS ($)$0.47 $0.37 $0.39
Segment Operating Income ($M)$383 $347 $385
SOI Margin (%)7.5% 7.2% 7.8%
Tire Units (Millions)—42.5 43.6
  • Notes: Adjusted EPS per reconciliation tables; Tire units not disclosed for Q4 2023 in release .

Segment breakdown – Q4 2024 vs Q4 2023

SegmentNet Sales Q4’23 ($M)Net Sales Q4’24 ($M)Tire Units Q4’23 (M)Tire Units Q4’24 (M)SOI Q4’23 ($M)SOI Q4’24 ($M)SOI Margin Q4’23SOI Margin Q4’24
Americas3,067 2,890 23.1 22.0 309 262 10.1% 9.1%
EMEA1,399 1,451 12.4 12.6 6 41 0.4% 2.8%
Asia Pacific650 606 9.9 9.0 68 82 10.5% 13.5%

Key quarterly KPIs and drivers

KPI / DriverQ3 2024Q4 2024
Goodyear Forward benefit to SOI ($M)123 195
Insurance proceeds to SOI, net ($M)17 52
Price/Mix vs Raw Materials ($M)Favorable YTD; not split for Q3; SOI impact offsetting lower volume Unfavorable: -$149
Volume impact ($M)-$74 -$42
Unabsorbed fixed costs ($M)—-$39
Interest expense ($M)135 131
Cash from Operations (quarter)—~$1.3B

Non-GAAP adjustments (Q4 2024)

  • Adjusted EPS reconciliation includes add-backs for rationalizations, Goodyear Forward costs, asset/other sales, pension settlement charges, indirect tax items, and adjustment for Americas storm insurance recoveries; net effect lifts GAAP EPS $0.26 to adjusted $0.39 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Goodyear Forward run-rate benefitsBy end-2025$1.5B run-rate (raised in Q3) Reaffirmed; 2025 gross y/y benefits ~$750M Maintained
SOI margin targetQ4 202510% Reaffirmed 10% in Q4 2025 Maintained
Net leverage targetEnd-20252.0x–2.5x Reaffirmed; pro forma YE’24 3.0x after OTR; further deleveraging planned Maintained; path clarified
Interest expense2025—~$60–$70M lower vs 2024 from debt reduction (incl. $500M 9.5% notes repayment) New detail
Consulting/Forward costs2025—-$80M vs 2024 New detail
Raw material headwindH1 2025—~+$350M (Q1 +$175M) at spot; possible +$100–$150M H2 if spots hold New detail
Price/mix tailwindQ1 2025—~+$65M (pricing actions + OE/raw-index contracts) New detail
Volume outlookQ1 2025—Global units -2% to -3% y/y; elevated U.S. wholesale inventory; OE down with lower production New detail
Unabsorbed fixed costsQ1 2025—~+$25M headwind from Q4 production cuts New detail
FXQ1 2025—-$15M headwind New detail
OTR divestiture impact2025—SOI -~$80M (incl. stranded costs; primarily Asia) New detail
Transitory mfg costs (footprint actions)H2 2025—~+$30M New detail

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
Goodyear Forward savings$90M in Q2; momentum building Target raised to $1.5B run-rate by end-2025; 2025 y/y benefits ~$750M $195M benefit in Q4; reaffirmed 2025 cadence and cost reductions Accelerating and embedded in execution
Portfolio optimization (OTR, Dunlop, Chemicals)OTR sale announced Targets reiterated OTR closed ($905M); Dunlop sale expected mid-2025; Chemicals review ongoing Deleveraging catalysts progressing
Raw materialsFavorable price/mix vs raws supported margins Mixed; Q3 SOI aided by insurance/price-mix H1 2025 headwind ~$350M; Q1 +$175M Turning to headwind near term
U.S. replacement market/low-end importsReplacement weakness, low-cost imports growing Replacement declines; low-end imports elevated Low-end import share at all-time highs; management lobbying on tariffs Ongoing pressure; policy variable
Product/mix & premium focusEV fitments up; APAC OE +32% Continued premium focus 5 new U.S. product lines; premium large-rim coverage expansion Mix upgrade underpinning margins
Manufacturing footprintDebica insurance benefit; plant optimization ongoing —Oklahoma modernization adds ~10M premium-unit capacity over 2025–26 Capacity shifting to premium
Regional trendsAPAC margins strengthening; EMEA improving APAC SOI +$16M; EMEA slight improvement EMEA +$35M SOI; APAC 13.5% margin Broadening recovery ex-Americas

Management Commentary

  • “We delivered fourth quarter segment operating income ahead of expectations… and exceptionally strong free cash flow… marked by transformation… we executed nearly $500 million of transformation benefits.” — CEO Mark Stewart .
  • “Segment operating income for the quarter was $385 million and SOI margin increased to 7.8%… Excluding insurance proceeds, SOI margin was 6.7%.” — CFO Christina Zamarro .
  • “Low-cost imported tires… from Southeast Asia… not subject to antidumping or countervailing duty tariffs… we have been quite active in our discussions with government officials.” — CEO Mark Stewart .
  • “Pro forma [post-OTR] year-end net debt was $6.1 billion, and our net leverage was 3x… We intend to repay the $500 million… 9.5% notes… generating $70 million in annual interest expense savings.” — CFO Christina Zamarro .
  • “We will introduce 5 product lines in the U.S. this year… and [modernize] our Oklahoma facility… add about 10 million units of new capacity for premium tires in ’25 and ’26.” — CEO Mark Stewart .

Q&A Highlights

  • Price/mix vs raws trajectory: Price/mix expected to build through Q2–Q3 on pricing actions and index-linked contracts; H1 raw materials headwind ~$350M, with potential H2 headwind of $100–$150M if spot holds .
  • Volume outlook: Global volumes -2% to -3% in Q1; H2 moderate growth on easier comps and recovering industry; management targeting premium SKU expansion to offset low-end import pressure .
  • Free cash flow and restructuring: 2025 FCF positive including ~$400M restructuring; EBITDA implied around ~$2.1B; 2026 restructuring normalizes to ~$100–$200M; total Forward restructuring likely ~$800M vs prior ~$1B expectation .
  • Ratings and balance sheet: Regular dialogue with agencies; expect improving sentiment as FCF turns positive and deleveraging continues with Dunlop proceeds .
  • APAC sustainability: APAC margin strength viewed as operational/structural rather than one-off; supported by manufacturing prowess and EV fitments .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 revenue and EPS was unavailable via our S&P Global feed at the time of analysis due to a data access limit, so we cannot state beats/misses vs consensus. We will update this section when S&P Global data is accessible.
  • Management stated SOI was “ahead of expectations” but did not quantify Street variance; we do not treat this as a Street beat without S&P Global figures .

Key Takeaways for Investors

  • Margin execution is intact: Q4 SOI margin rose to 7.8% with Forward savings and mix actions cushioning macro/raws—supports confidence in the 10% SOI margin target by Q4 2025 if tariff/mix initiatives stay on track .
  • Near-term caution, H2 recovery setup: Expect H1 2025 pressure from raw materials and volume; model sequential improvement from Q2 with pricing/index contracts ramping, Forward benefits, and easing comps into H2 .
  • Deleveraging catalysts: OTR cash-in, planned $500M bond repayment, and Dunlop proceeds (~$700M) underpin ~$60–$70M interest savings and lower leverage—potential rating and equity rerating levers if execution persists .
  • U.S. import/tariff dynamics are key swing factors: Upside if tariff scope broadens; downside if low-end imports persist—monitor policy developments and U.S. premium share gains from new product launches .
  • Regional diversification: EMEA recovery (winter/tighter mix) and APAC structural strength (EV fitments, high margins) provide offsets to Americas pressure; sustaining this breadth is central to the medium-term thesis .
  • Manufacturing modernization/mix shift: Oklahoma premium capacity (~10M units over 2025–26) plus global operating model changes should support premium mix, fixed-cost absorption, and structural margin lift .
  • Watch 2025 transitory costs/stranded costs: OTR sale reduces SOI by ~$80M and footprint actions add ~$30M H2 transitory costs; Forward benefits and pricing must outrun these drags to keep SOI roughly in line with 2024 including insurance .

Additional Relevant Press Releases (Q4 2024 context)

  • Goodyear completes OTR divestiture to Yokohama for ~$905M (Feb 3, 2025); proceeds to reduce leverage and fund Forward initiatives .
  • Company to announce Q4 & FY 2024 results on Feb 14 call, following Feb 13 release .

Sources:

  • Q4/FY 2024 8-K and Exhibit 99.1 press release, financial tables, and segment detail .
  • Q4 2024 earnings call transcript (prepared remarks and Q&A) .
  • Prior quarters’ press releases for trend analysis: Q3 2024 ; Q2 2024 .
  • OTR divestiture press release (Feb 3, 2025) .