Goodyear's Shares Barely Move Following Q1 Earnings Beat

Goodyear Tire GT shares have hardly moved since the company reported first-quarter 2025 results on May 7. It incurred adjusted loss per share of 4 cents in the quarter, narrower than the Zacks Consensus Estimate of a loss of 6 cents. The company reported earnings of 10 cents per share in the year-ago quarter.

The company generated net revenues of $4.25 billion, which declined 6.3% on a year-over-year basis due to lower volume and lagged the Zacks Consensus Estimate of $4.36 billion.

In the reported quarter, tire volume was 38.5 million units, down 4.8% from the year-ago period’s levels.

The Goodyear Tire & Rubber Company Price, Consensus and EPS Surprise

The Goodyear Tire & Rubber Company price-consensus-eps-surprise-chart | The Goodyear Tire & Rubber Company Quote

Segmental Performance

In the reported quarter, the Americas segment generated revenues of $2.50 billion, which marginally surpassed our estimate of $2.49 billion but declined 3.3% year over year due to lower replacement volume and an unfavorable impact forex rate. The segment registered an operating income of $155 million, which fell 13.4% from the year-ago period's figures. The operating income was hit by higher raw material costs. The figure also missed our expectation of $268.7 million.

Revenues in the Europe, Middle East and Africa segment were $1.28 billion, down 5.2% from the year-ago period's levels due to decreased tire volume and an unfavorable impact forex rate. The figure also missed our estimate of $1.35 billion. The operating loss for the segment was $5 million against the operating income of $8 million reported in the year-ago quarter due to higher raw material costs. 

Revenues in the Asia Pacific segment fell 21.3% year over year to $474 million due to lower replacement volume and the sale of the OTR tire business. The metric also missed our estimate of $581 million. The segment’s operating profit was $45 million, down 25% from the year-ago quarter’s figure, due to the divestiture of the OTR tire business. The figure also missed our estimate of $80.4 million.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Financial Position

Selling, general & administrative expenses fell to $650 million from $696 million in the year-ago period.

Goodyear had cash and cash equivalents of $902 million as of March 31, 2025, upfrom $810 million as of Dec. 31, 2024.

Long-term debt and finance leases amounted to $7.3 billion as of March 31, 2025, up from $6.4 billion as of Dec. 31, 2024.

Capital expenditure in the first quarter was $259 million, down from $318 million reported in 2024.

Outlook for 2025

For 2025, Goodyear expects capital expenditures to be $950 million. It expects interest expenses to be between $450 million and $475 million, and depreciation and amortization to be approximately $925 million.

Goodyear’s Zacks Rank & Key Pick

GT carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are Ferrari N.V. RACE and Standard Motor Products, Inc. SMP. RACE sports a Zacks Rank #1 (Strong Buy), while SMP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RACE’s 2025 sales and earnings implies year-over-year growth of 12.37% and 4.8%, respectively. EPS estimates for 2025 and 2026 have improved 30 cents and 36 cents, respectively, in the past seven days.

The Zacks Consensus Estimate for SMP’s 2025 sales and earnings implies year-over-year growth of 17.1% and 12.62%, respectively. EPS estimates for 2025 and 2026 have improved 6 cents and 2 cents, respectively, in the past 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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