Goodyear Stock Skyrockets 19.5% After Shocking Earnings Turnaround

Goodyear Tire & Rubber Company (NASDAQ: GT) shares soared 19.5% on Thursday, February 13, following the release of its fourth quarter and full-year 2024 earnings. The company reported a significant turnaround in earnings, with full-year net income of $70 million (24 cents per share) and adjusted net income of $302 million ($1.05 per share). The fourth quarter saw net income of $76 million (26 cents per share) and adjusted net income of $114 million (39 cents per share).



The impressive earnings results were driven by several key factors:

1. Goodyear Forward Transformation Plan: The company's transformation plan delivered $480 million in benefits in 2024, contributing to margin expansion across all business units. This plan aims to create a more profitable enterprise and drive shareholder value creation.
2. Business Interruption Insurance Proceeds: Goodyear received $52 million from business interruption insurance proceeds related to storm damage in prior years. These proceeds helped offset some of the unfavorable price/mix versus raw material costs and lower tire volume.
3. Improved Segment Operating Income: The company reported segment operating income of $385 million in the fourth quarter of 2024, up $2 million from a year ago. This improvement reflects the benefits from the Goodyear Forward plan and insurance proceeds, despite unfavorable price/mix versus raw material costs, lower tire volume, and unabsorbed fixed costs.

Goodyear's CEO, Mark Stewart, expressed confidence in the company's trajectory: "As I reflect on my first year at Goodyear, I am pleased with the progress we have made. We exceeded our full-year 2024 Goodyear Forward expectations and raised our targets for 2025, grew earnings and segment operating margins across all business units, and successfully reached agreements to divest non-core assets as part of our comprehensive strategic review. Moving forward, we remain committed to achieving our expanded Goodyear Forward targets, including further margin expansion and meaningful debt reduction."

The company's outlook for 2025 remains positive, with expectations for further cost savings, increased margin expansion, and significant debt reduction. Goodyear is well-positioned to drive further profitability and shareholder value in the coming year.

Investors who have been keeping an eye on the tire industry and the broader market trends should consider adding Goodyear to their portfolios. The company's strong earnings performance, coupled with its commitment to transformation and debt reduction, makes it an attractive investment opportunity. As always, it's essential to conduct thorough research and consider your risk tolerance before making any investment decisions.