Goodyear Tire Stock Surges Double-Digits on Earnings Beat

Goodyear Tire & Rubber Co. (GT) shares surged double-digits on Feb. 13, 2025, following the company's release of strong fourth-quarter and full-year earnings results. The stock price climbed 12.5% to $22.50 per share, driven by improved financial performance and positive outlook. Goodyear's earnings beat and subsequent stock surge can be attributed to several specific factors, including improved segment operating income (SOI), the successful implementation of the Goodyear Forward transformation plan, and strategic moves such as the divestment of non-core assets and the acquisition of the off-the-road tire business.

Goodyear reported fourth-quarter net income of $76 million (26 cents per share) compared to a net loss of $291 million ($1.02 per share) in the prior year. Adjusted net income for the quarter was $114 million, up from $135 million in the prior year's quarter. The company's segment operating income (SOI) was $385 million, up $2 million from a year ago, driven by benefits from the Goodyear Forward transformation plan and insurance proceeds related to storm damage. These benefits were partly offset by unfavorable price/mix versus raw material costs, lower tire volume, and unabsorbed fixed costs.

For the full year, Goodyear's net income was $70 million (24 cents per share) compared to a net loss of $689 million ($2.42 per share) in 2023. Adjusted net income for the year was $302 million, nearly five times the adjusted net income of $61 million in the prior year. The company's SOI was $1.32 billion, up $350 million from a year ago, thanks to Goodyear Forward, insurance proceeds, and net price/mix versus raw material costs. These benefits were partly offset by increased inflationary costs and lower tire volume.

Goodyear's Goodyear Forward transformation plan has significantly impacted the company's financial performance, contributing $195 million to the fourth quarter SOI and $480 million to the full-year SOI. The plan aims to improve operational efficiency, reduce costs, and drive growth. Additionally, Goodyear successfully reached agreements to divest non-core assets as part of its comprehensive strategic review, contributing to the company's earnings beat and improved financial performance.

In February 2025, Yokohama Rubber Co. Ltd. completed its acquisition of Goodyear's off-the-road (OTR) tire business in an all-cash transaction of approximately $905 million. This acquisition provided Goodyear with a significant cash influx, which contributed to its earnings beat in 2024. Additionally, the acquisition of the OTR tire business allowed Goodyear to expand its product portfolio and enter new markets, potentially driving future growth and earnings.

Goodyear's earnings beat and subsequent stock surge demonstrate the company's progress in executing its strategic plans and improving its financial performance. The company's focus on operational efficiency, cost reduction, and growth, as well as its strategic moves such as the divestment of non-core assets and the acquisition of the off-the-road tire business, have contributed to its strong performance. Investors can expect continued progress and improvements in the coming years as Goodyear continues to execute its Goodyear Forward transformation plan and expand its product portfolio.