Goodyear Tire & Rubber Q4 Earnings Call Highlights

Core Viewpoint - Goodyear Tire & Rubber reported a challenging fourth quarter in 2025, with revenue of $4.9 billion and segment operating income (SOI) of $416 million, marking the highest SOI and SOI margin in over seven years, despite facing significant headwinds in the industry [3][4][12]. Financial Performance - Fourth-quarter sales declined by 0.6% year-over-year due to lower volume and divestitures, while revenue per tire increased by 4% driven by an 8% rise in consumer replacement [2][4]. - SOI margin was 8.5%, up 1 percentage point excluding asset sales, with SOI increasing by approximately 9% year-over-year and 18% when adjusted for divestitures [1][3]. - Free cash flow exceeded $1.3 billion, contributing to a $1.6 billion reduction in net debt compared to the previous year [4][6]. Goodyear Forward Program - The Goodyear Forward transformation program has delivered $1.5 billion in run-rate benefits to date, with a focus on higher-value segments and an increase in new product launches by 30% compared to previous years [3][4]. - Management emphasized that the program's operational discipline will continue, aiming for a long-term SOI margin target of 10% [17]. Regional Performance - In the Americas, unit volume fell by 4% due to lower U.S. consumer replacement, with SOI at $233 million, representing just over 8% of sales [9]. - EMEA saw a 2% decline in unit volume, with SOI at $114 million (7.5% of sales), while Asia Pacific reported a 2% decline in unit volume but achieved an SOI of $69 million (13.1% of sales) [10][11]. Outlook and Challenges - For Q1 2026, management anticipates a 10% decline in volume driven by U.S. consumer replacement, alongside significant overhead costs and tariff impacts totaling approximately $130 million [12][16]. - The company expects only slightly positive free cash flow for 2026 in a base case scenario, reflecting ongoing challenges in the market [14].