The Goodyear Tire & Rubber Company

Second-quarter sales were $4.3 billion, down about 5% year over year, or down about 1% organically excluding divestitures. Unit volume declined 4%, gross margin decreased by 1 percentage point, segment operating income was $36 million, and non-GAAP EPS was a loss of $0.61. For Q3, management expects global unit volumes on the remaining business to be roughly flat year over year, price/mix to add approximately $110 million, raw materials to be a headwind of about $20 million, Goodyear Forward benefits of roughly $70 million, tariffs to be a headwind of about $10 million, and tax expense of roughly $50 million. For the full year, Scott Deakin said raw materials are expected to be essentially neutral, price/mix should contribute more than $200 million, Goodyear Forward should offset inflation and other cost increases, and tariffs should be a headwind of about $50 million; he also said SOI should be reduced by about $350 million versus the prior year on volumes and fixed-cost absorption, with the company saying that is broadly in line with prior guidance.

Mark Stewart framed the quarter as evidence that Goodyear’s stabilization is taking hold, pointing to sequential volume improvement, better market stability, and stronger OE share across all regions. He emphasized the company’s strategic reset around three priorities: a stronger product portfolio, a more competitive manufacturing footprint, and a better go-to-market model. His tone was confident and disciplined, with repeated emphasis on portfolio optimization, premium mix, and aligning capacity with demand rather than chasing low-margin volume.

Scott Deakin focused on the quarter’s financial mechanics: sales of $4.3 billion, a 1 percentage point gross margin decline, $36 million of segment operating income, and a $0.61 non-GAAP loss per share. He said free cash flow was a use of $69 million, improving $318 million versus last year, and net debt declined by over $700 million year over year; the company also issued about $1 billion of senior notes and intends to use the proceeds to repay 2027 notes. On Fayetteville, he quantified roughly $200 million of cash costs, with about $40 million in 2026, $100 million in 2027, and the rest in 2028, while reiterating the longer-term annual SOI benefit of about $270 million in 2028 and thereafter. He also said fiscal 2026 free cash flow should be a burn year of about $200 million to $300 million, with some continued burn in 2027.

Analysts focused on whether Q3 and Q4 volume assumptions imply continued OE strength and a less severe replacement decline, and management said the second half should improve mainly because channel destocking is largely behind them, SKU rationalization is lapping, and Americas consumer replacement is stabilizing. Another key topic was whether Goodyear needs more restructuring beyond Fayetteville; Mark Stewart said the company is still evaluating its footprint, but emphasized ongoing modernization, closures already completed in Europe, and investments to align supply with demand. Questions also centered on cash burn and raw materials into 2027; Scott said 2026 should be a $200 million to $300 million cash burn year and that raw-material dynamics remain uncertain, though 2027 could see some benefit from Middle East oil stabilization even as indexes reset higher in parts of the business. A final area was retail, where Mark said company-owned retail in the U.S. is performing better than in over two decades and remains strategically useful for staying close to consumers and channels.