Goodyear sharpens focus on ‘transformation’ as earnings fall 39%

Akron, Ohio – Goodyear has established a new "dedicated transformation office" to identify further operational and strategic improvements, as its third-quarter operating earnings fell 39% year-on-year amid continued market pressures.

Segment operating income declined 39.4% to $174 million (€154 million) from $287 million in the third quarter of 2025.

Excluding the impact of the divestments, earnings fell by $57 million, reflecting a $77-million impact from lower volumes, $69 million in inflation and $48 million in higher tariffs and other costs.

The declines were partly offset by $90 million in savings from the 'Goodyear Forward' transformation programme and $76 million in favourable price/mix over raw-material costs, said Goodyear 4 Nov.

The US tire maker posted a 2.3% year-on-year decline in net sales to $4.54 billion, while tire unit volumes fell 3.3% to 38.6 million units.

Excluding the divestments of its Chemical business and the Dunlop brand, organic sales increased 1.6%, driven by favourable price/mix, partially offset by lower volumes.

"While our third quarter results reflected meaningful sequential earnings improvement, our financial performance remains below our expectations," said president and CEO Mark Stewart.

"We've made real progress in strengthening our product portfolio and optimising our manufacturing footprint," he added.

However, Stewart warned that as "challenging industry conditions persist, incremental improvements alone won't get us to where we need to be."

Goodyear has therefore established a "dedicated transformation office" to evaluate further operational and strategic opportunities.

According to Stewart, the initiative will pursue "structural changes" aimed at generating more consistent free cash flow.

The company also reported progress in shifting towards higher-value consumer tires, with products measuring 18 inches and above accounting for 44% of sales volumes, compared with 39% a year earlier.

Regional performance

In the Americas, third-quarter sales fell 2.3% year-on-year to $2.68 billion, largely reflecting the divestment of Goodyear's Chemical business.

Tire volumes remained unchanged at 19.6 million units, with replacement sales declining 2.2% and OE volumes increasing 8.7% on market share gains.

Segment operating income fell 53.4% to $96 million from $206 million a year earlier.

Excluding the Chemical business sale, earnings declined by $76 million due to lower factory utilisation, inflation and other costs, partly offset by Goodyear Forward savings.

In Europe, Middle East and Africa (EMEA), sales declined 3.7% year-on-year to $1.36 billion, reflecting the Dunlop brand divestment and lower tire volumes.

Regional tire volumes fell 6.7% to 11.1 million units.

Replacement volumes declined 11.3%, reflecting "consumer market softness" and "planned SKU rationalisation," Goodyear said.

OE volumes, however, increased 5.5%, marking the "11th consecutive quarter of consumer market share gains."

EMEA reported segment operating income of $12 million, compared with $30 million in the prior-year quarter.

Excluding the Dunlop divestment, however, operating income improved by $5 million, supported by favourable price/mix over raw-material costs and Goodyear Forward savings.

The improvements were partly offset by inflation, higher manufacturing expenses and lower volumes.

Asia Pacific, meanwhile, delivered the strongest earnings improvement, with segment operating income rising 29.4% year-on-year to $66 million from $51 million.

Regional sales increased 1.8% to $510 million, although tire volumes declined 6% to 7.9 million units.

Replacement volumes fell 8.2%, reflecting planned product rationalisation, while OE volumes declined 3.9%, primarily due to weaker demand in China.

Goodyear attributed the region's earnings improvement to favourable price/mix over raw-material costs and Goodyear Forward savings, partly offset by lower volumes.

The US tire maker said it would continue strengthening its product portfolio and manufacturing operations while pursuing further measures to improve profitability and cash generation.