Goodyear Reports Strong Q4 2025 Results with Record Operating Income
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy GT?
Source: PRnewswire
- Stable Sales Performance: Goodyear's Q4 2025 net sales were $4.9 billion, flat compared to 2024, with organic sales growth of 4% after adjustments, indicating the company's ability to maintain stable sales performance despite competitive market challenges.
- Profitability Improvement: The fourth quarter net income was $105 million, or $113 million adjusted, reflecting a year-over-year increase that showcases the company's success in cost control and pricing strategies, thereby boosting investor confidence.
- Record Operating Income: Total segment operating income reached $416 million in Q4, up 9% year-over-year, with organic growth of 18%, marking the highest operating income and margin achieved in over seven years, demonstrating the effectiveness of the company's strategic initiatives.
- Strong Cash Flow: Goodyear generated $1.5 billion in cash flows from operating activities in Q4, indicating significant improvements in cash management and operational efficiency, providing robust support for future investments and debt repayments.
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Analyst Views on GT
Wall Street analysts forecast GT stock price to rise
5 Analyst Rating
3 Buy
1 Hold
1 Sell
Moderate Buy
Current: 9.340
Low
7.30
Averages
9.86
High
13.00
Current: 9.340
Low
7.30
Averages
9.86
High
13.00
About GT
The Goodyear Tire & Rubber Company is a tire company. It develops, manufactures, distributes and sells tires for most applications. It also operates commercial truck service and tire retreading centers. The Company operates approximately 800 retail outlets where it offers its products for sale to consumer and commercial customers and provides repair and other services. It manufactures its products in 51 manufacturing facilities in 19 countries. Its segments represent its regional tire businesses: the Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific. It manufactures and sells numerous lines of rubber tires for automobiles, trucks, buses, aircraft, motorcycles, earthmoving and mining equipment, farm implements, industrial equipment, and various other applications. Its brands include Goodyear, Cooper, Kelly Tires, Mastercraft Tires, Mickey Thompson, Roadmaster, Debica, Sava, Fulda, Avon Tyres, and Sava, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Annual Loss: For the full year 2025, Goodyear's sales declined by 2% to $10.8 billion, with operating profit margins dropping 170 basis points to 6.8%, leading to a substantial loss of $5.99 per share, highlighting severe financial challenges.
- High Debt Risk: With net debt at $6.5 billion, exceeding its $3 billion market capitalization, and an enterprise value-to-free cash flow ratio of 55x, Goodyear's stock appears overvalued, prompting caution among investors.
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- Strong Cash Flow Performance: The company generated over $1.3 billion in free cash flow, with net debt declining by $1.6 billion year-on-year, showcasing robust financial health that supports future investments and shareholder returns.
- Effective Strategic Transformation: Under the Goodyear Forward program, the company achieved $1.5 billion in run rate benefits and aims for 10% organic growth in 2026, demonstrating its ongoing focus on high-value market segments and product innovation.
- Cautious Market Outlook: Despite management's optimism for the future, a projected 10% decline in first quarter volume and a $60 million headwind from unabsorbed overhead may impact short-term performance.
See More
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- Earnings Miss: The adjusted earnings per share were $0.39, falling short of analysts' expectations of $0.49, although GAAP earnings of $0.36 represented a 44% year-over-year increase, reflecting the company's profitability under specific conditions.
- Annual Decline: For the full year 2025, Goodyear's sales declined by 2% to $10.8 billion, with operating profit margins dropping by 170 basis points to 6.8%, highlighting a significant deterioration in overall profitability.
- Debt Pressure: Goodyear's net debt stands at $6.5 billion, exceeding its $3 billion market capitalization, resulting in an enterprise value-to-free cash flow ratio of 55x, suggesting that the current stock price may be overvalued and increasing investment risks.
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