The Goodyear Tire & Rubber Company (NASDAQ: GT)
**Q3 2025 Earnings Call Transcript**
**November 4, 2025**

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**Operator:**
Good morning. My name is Katie, and I’ll be your conference operator today. At this time, I would like to welcome everyone to Goodyear’s Third Quarter 2025 Earnings Call.
[Operator Instructions]
Please note this call may be recorded. It is now my pleasure to turn the conference over to Ryan Reed, Vice President, Investor Relations. Please go ahead, sir.

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**Ryan Reed:**
Thank you, and good morning, everyone. Welcome to our third quarter 2025 earnings call. With me today are Mark Stewart, CEO and President; and Christina Zamarro, Executive Vice President and CFO.

A couple of notes before we get started. During this call, we’ll make forward-looking statements and refer to non-GAAP financial measures. For more information on the most significant factors that could affect our future results and for reconciliations of non-GAAP measures, please refer to today’s presentation and our filings with the SEC. All our earnings materials can be found on our website at investor.goodyear.com, where a replay of this call will also be available.

I’ll now turn the call over to Mark.

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**Mark Stewart:**
Thank you, Ryan, and good morning, everyone. Thank you for joining our call.

As outlined in our press release, we delivered revenue of $4.6 billion and segment operating income of $287 million in the quarter, results slightly ahead of the revised expectation we shared with you all on our last call.

It’s important to view these results in the context of an industry environment that remains challenging, particularly given continued volatility and global trade flows. Even in that environment, we achieved meaningful sequential earnings and margin expansion, driven by the continued strong execution of the Goodyear Forward initiatives.

Last quarter, I emphasized our focus on controlling the controllables and that approach continues to guide our actions here at Goodyear.

With yesterday’s announcement on the Chemicals business, we’ve now completed our planned divestitures, and we’re bringing the balance sheet back to a position of health. We’ve introduced more premium product lines than ever before while improving organizational agility and sharpening our focus on margin and profitability.

We’re positioning the business to be able to leverage those strengths as the market environment begins to normalize.

With the remainder of my time today, I’ll discuss what we’re seeing across the industry and in each of our business segments, and how we’re responding.

After that, I’ll hand it over to Christina to walk through our third quarter financial results and how we’re thinking about the outlook for the remainder of ’25.

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### Americas Segment

In the Americas, the consumer replacement market continued to experience disruption similar to last quarter.

On the consumer OE side, volume performed well, supported by strength in light truck and SUV fitments. Additionally, we’ve won additional fitments driven by OEM preferences for USMCA-compliant supply. We expect OEM resourcing to remain a positive contributor for us going forward.

As you all know, with U.S. tariffs on consumer tires effective in May, the domestic replacement market saw a surge of low-cost imports, coinciding with the implementation of increased duties during the first half of this year.

In the third quarter, U.S. non-USTMA member imports were up an estimated 2%, which is actually a positive development compared to the significant growth we saw in the first half of this year. More recently, we’re hearing that the low-end imports may have slowed further, though it may take more time to confirm that trend, given the current government shutdown, which impacts the reporting of the imports.

At a macro level, U.S. vehicle miles traveled are trending up about 1 percentage point year-to-date, while industry sellout is roughly flat, suggesting consumers are extending the replacement cycle. Meanwhile, dealer and distributor channel inventories remain elevated with prebuy, and we expect the consumer replacement environment to stay challenging in the near term.

Our focus in that environment has been on introducing new high-margin product lines, the 18 and above rim size and targeted product line extensions to drive our earnings in the coming year.

In October, we revitalized our all-terrain product portfolio with the launch of three new product lines designed for SUV, light truck, and off-road applications. The new lineup includes the Goodyear Wrangler Outbound AT, Goodyear Wrangler Workhorse AT2, and the Goodyear Wrangler Electric Drive AT.

We’ve also finalized our famous Goodyear Eagle F1 lines with our new all-season tire for the high-performance segment as well. Consumer feedback during launch events has been exceptionally strong.

We’re aligning distribution and retailer partnerships to ensure priority availability and service for our most profitable products. In our company-owned retail stores, we are upgrading the store and customer experience with enhancements including more products, more financing options, and a complete refresh of the environment at select locations nationwide.

We have achieved meaningful earnings growth in our retail business over the past year through increasing same-store service revenues and addition of new last-mile mega fleet business. With this success, we plan to open new brick-and-mortar storefronts in the coming quarters, strengthening our retail footprint as a differentiator.

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### Americas Truck Business

Conditions were similar to the second quarter. Heavy truck builds in the U.S. declined over 30% as OEMs adjusted production amid reduced end market demand, driven by uncertainty over EPA emissions mandates.

In replacement, imports remained elevated during the third quarter as commercial tire IEEPA tariffs were implemented in August.

We expect fourth quarter industry conditions in the U.S. to broadly reflect the same dynamics as the third quarter with elevated channel inventories and potential for some incremental reductions in OE volume, given multiple OEM supply chain challenges.

We continue to expect momentum to return as these transitory headwinds resolve.

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### EMEA Segment

Similar to U.S. dynamics, EMEA’s consumer replacement industry was driven by a prebuy of imports ahead of tariffs expected early next year. While domestic manufacturers lagged the industry, we returned the business to profitability following a weak first half.

This improvement was driven by 20% growth in consumer OE volume, representing more than 3 points of market share gain. OE profit per tire in EMEA is increasing, indicating the right choices with our OE partners.

Our OE portfolio reflects industry-leading technology and product performance.

We completed two major factory restructuring actions in the region during the quarter, strengthening the foundation for continued operational performance.

Looking ahead, winter order book and channel inventories are healthy, and we are optimistic about EMEA’s earnings potential in the fourth quarter.

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### Asia Pacific Segment

Execution and SOI margin remained strong. We have exited less profitable SKUs and increased our mix of high-margin product lines.

In the third quarter, we outpaced the consumer replacement industry in Goodyear brand 18 and above rim sizes in China.

New OE fitment wins with Geely, VW and Toyota are ramping through the fourth quarter, and we expect to return to year-over-year OE growth and further improve SOI and margin.

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Before closing, I want to emphasize that despite the uneven market backdrop, our steady and consistent execution of the Goodyear Forward Plan has been instrumental in positioning the business for near-term stability and long-term success.

I want to thank all our associates worldwide for their efforts and results.

Goodyear Forward is more than numbers; it defines the evolution of the company and how we will continue to create value.

With that, I’ll turn it over to Christina.

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**Christina Zamarro:**
Thank you, Mark, and good morning, everyone.

Our third quarter results show lower costs driven by Goodyear Forward and a significant reduction in debt.

We are well positioned for growth as the broader economy strengthens in 2026.

Prebuy channel inventory tied to tariffs is depleted, and the implementation of tariffs in the U.S. and potentially in Europe begins to reshape market dynamics in our favor.

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### Financial Results (Slide 9)

Third quarter sales were $4.6 billion, down 3.7% from last year, reflecting lower volume and the sale of OTR, partly offset by price/mix improvements.

Unit volume declined 6%, reflecting lower consumer replacement volume.

Segment operating income was $287 million, decreasing from last year but increasing $128 million versus the second quarter.

Goodyear reported a net loss of $2.2 billion, driven by noncash nonrecurring items, including a deferred tax valuation allowance and goodwill impairment in the Americas.

The valuation allowance against tax assets does not limit our ability to use them in the future.

Adjusted earnings per share were $0.28 compared to $0.36 last year.

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### Segment Operating Income Walk (Slide 10)

– Sale of off-the-road business reduced earnings by $10 million.
– Post-change, segment operating income declined $49 million versus last year.
– Lower tire unit volume and factory utilization were a $90 million headwind; price/mix improvements contributed $100 million.
– Raw materials were a $81 million headwind.
– Goodyear Forward contributed $185 million benefit.
– Inflation and other costs were a $137 million headwind, including ~$40 million tariffs, $25 million manufacturing inefficiencies due to factory closures and lower production, and $20 million increased transportation and warehousing costs.
– Nonrecurrence of insurance proceeds from last year was a $17 million headwind.
– Other segment operating income was a $16 million headwind.

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### Cash Flow & Balance Sheet (Slide 11)

Operating cash flow was about flat for the quarter. Third quarter CapEx resulted in free cash flow usage of $181 million.

Year-to-date free cash flow includes proceeds from asset sales, covering long-term supply agreements and a prepaid Dunlop inventory transfer to occur at year-end.

We expect year-end operating cash flow benefits related to supply, licensing, and transition agreements to be about $370 million, inclusive of the chemical sale.

Pro forma for the chemicals transaction, third quarter debt declined about $1.5 billion, reflecting asset sale proceeds (net of fees), partly offset by cash used for working capital and restructuring over the last 12 months.

We expect to generate significant free cash flow in the fourth quarter, consistent with historical seasonality.

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### SBU Results (Slide 13-15)

**Americas:**
Unit volume decreased 6.5%, largely from consumer replacement decline. U.S. consumer replacement industry sell-in fell 4%, low-end imports increased 2%, but growth in imports has slowed significantly. Consumer OE volume grew 4%, marking the seventh consecutive quarter of OE share gains. Commercial OE volume declined 33% due to reduced OEM production amid freight market weakness and EPA mandate uncertainty. Commercial replacement imports grew 64% prior to IEEPA tariff implementation.

Segment operating income was $206 million, down $45 million from last year, driven by lower volume partly offset by Goodyear Forward benefits.

**EMEA:**
Unit volume decreased 2%, due to replacement volume declines following EU import prebuy. Proposed EU tariffs range 41%-104%, potentially retroactive through October. Announced relaunch of Cooper brand to fulfill demand post-Dunlop sale and ensure comprehensive portfolio. Consumer OE volume grew 20% (seventh consecutive quarter of OE share gains). Segment operating income was $30 million, up $7 million driven by price/mix benefits.

**Asia Pacific:**
Unit volume decreased 9%, driven by consumer OE and replacement volume declines due to reduced low-margin business and distribution realignment. OE volume declined due to customer mix favoring low-priced vehicle promotions in China. Segment operating income was $51 million, over 10% of sales. We expect volume growth in Q4 from new fitments and replacement volume increases.

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### Fourth Quarter Outlook (Slide 17-18)

– Expect meaningful sequential SOI increase, with all regions contributing.
– Year-over-year Q4 SOI growth expected mid-single digits, excluding divestitures impact.
– Consumer replacement volume expected to be affected by high channel inventories in U.S. and EU; consumer OE volume to mirror Q3 growth.
– Commercial truck volume outlook is modest amid ongoing challenges.
– Overall global volume expected down about 4%.
– Higher unabsorbed fixed costs of $70 million due to 2 million-unit lower production in Q3.
– Fourth quarter production could be up to 4 million units lower than last year, reflecting industry volatility.
– Price mix benefit estimated at $135 million due to prior pricing actions.
– Raw material costs expected slight benefit based on current spot rates.
– Goodyear Forward anticipated to contribute $180 million in benefits.
– Inflation, tariffs, and other costs expected to be a $190 million headwind, including ~$80 million tariffs, increased freight rates, and manufacturing inefficiencies from lower production.
– Annualized tariff costs estimated at $300 million, $50 million less than prior guidance due to Canada’s tariff elimination on U.S. imports.
– Expect business interruption insurance proceeds from Poland factory fire to largely offset nonrecurrence of $52 million insurance proceeds last year.
– Sales of OTR and chemical businesses expected to reduce earnings by about $30 million in Q4.

Other financial assumptions include updates to working capital and an increase in restructuring due to a new Q4 program.

We remain focused on driving strong free cash flow through Q4.

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### Q&A Highlights

**Consumer OE Market Share Gains:**
– Continuous strategic focus on increasing OE exposure, especially premium larger rim sizes.
– Seven consecutive quarters of growth in Americas and EMEA consumer OE share.
– USMCA compliance providing OEM support in Americas.

**2026 Outlook – Price Mix & Raws:**
– Goodyear Forward expected to provide $250 million+ in cost benefits.
– Flow-through pricing actions estimated to add around $100 million.
– Raw materials expected to yield a $200 million benefit, even including the chemical transaction impact.
– Inflation headwind around $200-$225 million.
– Tariff carryover costs expected $150-$160 million.
– Insurance recovery from Poland fire impacts expected in Q4 2025.

**Commercial Vehicle Environment:**
– Commercial fleet business remains strong, especially premium fleets and subscription services.
– Industry volatility from emission mandate uncertainty causing extended truck life to delay replacement demand.

**Channel Inventory Digestion:**
– Consumer replacement channel inventory sell-through expected through end of Q4 2025.
– Commercial channel inventory digestion could extend into Q1 2026.

**EMEA OE Growth:**
– Broad-based consumer OE gains across Europe, supported by strengthened OEM partnerships and premium SKU introductions.

**Restructuring Update:**
– Completed 4-5 major restructuring actions globally; additional U.S. restructuring program planned for Q4.

**Insurance Collections:**
– Business interruption insurance recovery of ~$50 million anticipated in Q4 2025 related to the Debica fire.

**Tariff Seasonality & Mitigation:**
– Tariffs costs follow seasonality driven by volume, with higher costs expected in H2.
– Active engagement in lobbying and sourcing optimization underway to mitigate tariff impact.
– Manufacturing footprint realignment focused on competitive landed costs and regional supply preference.

**Cash Flow Outlook:**
– Q4 2025 forecasted to generate EBITDA around $1.8 billion.
– Free cash flow expected near breakeven in Q4 2025 excluding ~$200 million in asset sale fees.
– Asset sale proceeds expected to be about $1.9 billion in investing activities.

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**Closing Remarks – Mark Stewart:**
Thank you all for joining today.

While short-term conditions remain turbulent with global trade volatility, we remain laser-focused on controlling the controllables. We continue to execute Goodyear Forward strongly, maintain cost discipline, and bring new premium SKUs to market.

We have completed our planned divestitures and restored the balance sheet to health. We are driving sequential earnings growth via cost actions and share gains.

OEM volume growth outpaces the market, especially in the 18-inch-plus segment globally, with strong new product launches and positive winter tire order trends in EMEA.

We are expanding retail operations and sharpening our portfolio to position the company to leverage growth as markets normalize.

Thank you again for joining.

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**End of Transcript**
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