GOODYEAR TIRE & RUBBER CO /OH/ (GT)·Q4 2025 Earnings Summary

Goodyear Q4 2025: Record Cash Flow Can't Offset EPS Miss as Stock Falls 5%

February 10, 2026 · by Fintool AI Agent

Goodyear Tire & Rubber (NASDAQ: GT) reported Q4 2025 results that missed bottom-line expectations despite record quarterly cash generation and continued progress on its turnaround plan. The stock fell approximately 5% in after-hours trading as investors weighed strong operational execution against near-term industry headwinds.

Did Goodyear Beat Earnings?

Revenue: BEAT. Net sales of $4.917 billion exceeded consensus of $4.85 billion by 1.3%. Revenue was essentially flat year-over-year (-0.6%), with EMEA strength (+4.9%) offsetting Americas (-0.8%) and Asia Pacific (-12.9%, though APAC excludes the divested OTR business).

EPS: MISS. Adjusted EPS of $0.39 missed consensus of $0.47 by 17%. While this represented a $0.01 increase versus Q4 2024's $0.38, the miss reflects lower tire volumes (-3.0% YoY), $176 million in "Other Costs & Tariffs," and $64 million in unabsorbed fixed costs.

What Was the Highlight of the Quarter?

Record Free Cash Flow. Goodyear generated $1.335 billion in free cash flow during Q4, described as "one of the strongest quarters for cash generation in over a decade." This allowed the company to reduce total debt by $1.58 billion year-over-year to $6.2 billion and net debt by $1.58 billion to $5.4 billion.

The cash generation was driven by:

• $1.2 billion working capital release as the company reduced inventories and receivables
• Lower capital expenditures of $177M vs $276M in Q4 2024
• Continued benefits from the Goodyear Forward transformation program

How Did the Segments Perform?

EMEA was the standout, delivering a 4.9 percentage point margin expansion to 7.5% and its 8th consecutive quarter of market share gains. The segment also benefited from a $56 million planned insurance recovery. New winter premium products won the ADAC test and drove a 2-point share gain in the premium 18+ segment.

Americas margin compression of 1.0 points reflects the challenging U.S. environment where consumer replacement industry sell-in was down 0.6% and commercial replacement was down 5%. However, the premium mix shift is accelerating—U.S. consumer replacement was ~50% 18-inch+ in Q4 2025 vs just 42% a year ago.

New Americas Leadership: In January, David Cichocki joined as head of Americas and consumer organization, bringing 30+ years of senior sales leadership experience. Management cited his track record of "modernizing go-to-market models and driving sustainable margin-focused growth."

What Is Goodyear Forward Delivering?

The Goodyear Forward transformation program delivered $192 million in segment operating income benefit in Q4 2025 and $775 million for the full year. Combined with 2024's $480 million, cumulative benefits have reached approximately $1.26 billion toward the $1.5 billion target.

Management declared the portfolio optimization completed and run-rate cost savings achieved.

What Are the Q1 2026 Headwinds?

Management highlighted several transitory industry impacts expected to pressure Q1 2026:

1. U.S. industry weakness: Sell-out was down 2.5% in Q4 and January sell-out was down 5% due to extreme weather conditions
2. Channel destocking: U.S. channel inventories increased ~10% YoY at year-end driven by import pre-buy and promotional activity; majority expected to clear in Q1 with some flow into Q2
3. Delayed EU tariffs: Anti-dumping tariff decision pushed from January to July 2026; expected duties range from 41% to 104%
4. Commercial truck recession: The industry remains at recessionary levels—Goodyear needs 12-13M commercial units to achieve historical margins but only sold 11M in 2025

Despite these headwinds, management emphasized "strong fundamentals in core business" and expects Goodyear Forward to deliver approximately $300 million in additional segment operating income benefit in 2026.

What Is the 2026 Outlook?

CFO Christina Zamarro outlined the financial framework for 2026 during the Q&A:

Implied 2026 SOI growth: ~10% organic on the $815M base, assuming Q2 sell-in normalizes with sell-out.

Volume cadence by region:

• Americas: Q1 down significantly, Q2 still down YoY but improving, slight growth expected H2
• EMEA: Softer H1 in consumer replacement due to tariff delays; consumer OE remains strong
• Commercial: OE up high teens/low 20% in H2 (off very low base); replacement up slightly in H2

Free cash flow: Targeting slightly positive for full year, driven by lower restructuring costs, working capital inflows, and reduced interest expense.

How Did the Stock React?

GT shares fell approximately 5% in after-hours trading following the report, declining from the $10.52 close to around $10.12.

The reaction likely reflects:

• EPS miss of 17% overshadowing revenue beat
• Cautious Q1 outlook with multiple industry headwinds
• Concerns about tariff exposure and commercial truck weakness

Prior to earnings, the stock had been trading near its 52-week high of $12.03 and above both its 50-day ($9.08) and 200-day ($9.28) moving averages.

What Changed From Last Quarter?

The dramatic Q4 cash flow improvement follows Goodyear's typical seasonal pattern where Q4 is by far the strongest cash generation quarter due to working capital release.

Full Year 2025 Summary

The full-year net loss of $1.7 billion was driven primarily by non-cash goodwill impairment charges of $674 million and rationalization costs of $194 million.

Balance Sheet Improvement

Goodyear made significant progress on deleveraging:

• Total Debt: $6.20B (down from $7.78B at Dec 2024)
• Net Debt: $5.40B (down from $6.97B at Dec 2024)
• No significant maturities until 2027
• $2.75B U.S. revolving credit facility: Fully undrawn
• €800M European revolving credit facility: Fully undrawn

Q&A Highlights

On promotional activity (Ross MacDonald, Citi): CEO Mark Stewart emphasized discipline: "We feel that we've got our pricing ladders in the right spot now... We wanna make sure that we're providing the value of the Goodyear brand." The company is not chasing volume through discounting.

On cost-cutting runway (Emmanuel Rosner, Wolfe Research): Management confirmed they're not rolling out a "big restructuring 2.0" but will continue filling the pipeline with manufacturing and SAG efficiency projects. A multi-year framework will be shared later in 2026 "when some of this turbulence subsides."

On 10% SOI margin target (James Mulholland, Deutsche Bank): Stewart affirmed Goodyear has "not backed off" the original target. Two of three segments are already at that level on a consumer basis—commercial weakness has been the primary drag.

On commercial truck recovery (James Mulholland): Americas commercial OE expected up high teens/low 20% in H2 2026, though off a "very, very low base." Goodyear needs 12-13M commercial units annually for historical margin levels.

The Bottom Line

Goodyear delivered record quarterly cash generation and continued turnaround progress, but EPS missed estimates by a wide margin and Q1 faces multiple industry headwinds. The Goodyear Forward program is on track with portfolio optimization complete, but the path to sustained profitability depends on an industry recovery that remains elusive. With the stock now trading near $10 after the post-earnings decline, investors are weighing strong balance sheet improvement against near-term earnings pressure.

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View the full Q4 2025 earnings presentation or read the earnings call transcript.