Goodyear (GT) Down 21.9% Since Last Earnings Report: Can It Rebound?

Core Viewpoint - Goodyear's recent earnings report showed a decline in performance, with shares down approximately 21.9% since the last report, underperforming the S&P 500. The company missed earnings expectations and reported a decrease in net revenues and tire volume [1][2]. Financial Performance - Goodyear reported fourth-quarter 2025 adjusted earnings per share of 39 cents, missing the Zacks Consensus Estimate of 45 cents. This figure remained unchanged from the previous year [2]. - Net revenues for the quarter were $4.92 billion, a decline of 0.6% year-over-year, also missing the consensus estimate of $4.93 billion [2]. - Tire volume was reported at 42.3 million units, down 3% from the previous year [3]. Segmental Performance - The Americas segment generated revenues of $2.87 billion, down 0.8% year-over-year, with an operating income of $233 million, a decrease of 11.1% from the previous year [4]. - The Europe, Middle East, and Africa segment reported revenues of $1.52 billion, an increase of 4.9% year-over-year, with operating income rising to $114 million from $38 million in the previous year [5]. - The Asia Pacific segment saw revenues fall by 12.9% year-over-year to $528 million, with operating profit down 15.9% to $69 million due to the divestiture of the OTR tire business [6]. Financial Position - Selling, general & administrative expenses increased to $701 million from $692 million in the previous year [7]. - Cash and cash equivalents were $801 million as of December 31, 2025, down from $810 million a year earlier [7]. - Long-term debt and finance leases decreased to $5.33 billion from $6.4 billion [7]. - Capital expenditure for 2025 was reported at $826 million, down from $1.19 billion in 2024 [7]. Outlook - Goodyear expects capital expenditures of $825 million for 2026, with interest expenses projected between $400 million and $425 million, and depreciation and amortization around $915 million [8]. - Recent estimates have shown a downward trend, with a significant shift of -362.6% in consensus estimates [9]. - Goodyear currently holds a Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [11].