Goodyear expects earnings hit from lower volumes, tariffs

Akron, Ohio – Goodyear expects first-quarter earnings to be pressured by lower volumes, tariffs and weak trading conditions, as headwinds that impacted its 2025 results persist.

Speaking during the Akron tire maker’s 10 Feb full-year earnings call, EVP and CFO Christina Zamarro said market conditions entering 2026 remain challenging.

“Business trends moving into 2026 still reflect many of the same headwinds we faced in 2025,” she said, adding that “overall weak industry conditions continue to affect our global operations in terms of top line and cost.”

The US group, therefore, expects first-quarter volumes to fall by about 10% globally, mainly due to weaker demand in the US consumer replacement market.

Zamarro said promotional activity in the fourth quarter had increased channel inventories, while January ‘sell-out’ declined sharply amid “extreme winter temperatures and weak consumer sentiment more broadly.”

In Europe, uncertainty has also been compounded by delays to a ruling on potential tariffs on consumer tire imports, the Goodyer CFO explained.

As a result, Goodyear expects first-quarter segment operating income (SOI) to be affected by the “convergence of lower consumer replacement volume, fixed cost carryover from 2025 and a continuation of unusually weak commercial truck trends.”

The company said unabsorbed overheads will represent a $60 million (€52 million) headwind, reflecting production cuts introduced late last year to manage inventory levels.

Despite the weaker demand outlook, Goodyear expects some offsetting benefits from pricing and costs.

Price and product mix are expected to contribute around $25 million in positive impact, reflecting earlier price increases and the effect of raw material index contracts.

Lower raw material costs are projected to deliver about $85 million in benefits during the quarter, with the company estimating a $300 million benefit for the full year at current spot rates.

Goodyear’s cost and restructuring programme, Goodyear Forward, is expected to generate around $100 million in savings in the first quarter and about $300 million across 2026.

However, inflation, tariffs and other costs will remain a major drag on profitability.
Zamarro said the company expects a $185 million increase in costs in the quarter, including about $55 million in core inflation, $65 million in tariffs and $65 million in higher transportation and manufacturing-related costs.

For the full year, tariffs alone are expected to represent a $175 million headwind, with additional costs related to warehousing, freight and temporary manufacturing inefficiencies linked to previously announced plant closures.

The company also said recent divestments will reduce earnings contributions.

Sales of the Dunlop brand and its chemical business will lower earnings by $37 million in the first quarter and around $185 million for the full year.

Meanwhile, Zamarro said Goodyear will recognise $55 million in deferred revenue amortisation in 2026 related to supply agreements tied to the asset sales.

Despite the near-term pressures, the Goodyear executive said the company expects performance to improve later in the year.

“These are temporary factors, and we're confident that we'll regain earnings and margin momentum once this turbulence subsides,” she said.