Goodyear Tire & Rubber Co

Goodyear reported second-quarter revenue of $4.25 billion, beating analyst estimates of $4.21 billion but still down 4.8% year over year, while adjusted EPS came in at a loss of $0.61 per share versus expectations of a $0.63 loss. CEO Mark Stewart attributed the results to persistent weakness in the Americas, particularly in consumer replacement tires, though he noted channel destocking moderated from the first quarter. Interim CFO Scott Deakin said margin compression was driven mainly by lower volumes and unfavorable fixed cost absorption, with inflation and tariff costs compounding the issue. During the earnings call, analysts pressed management on topics including the balance between replacement and OE volumes, capacity rationalization beyond the Fayetteville closure, raw material cost timing, the role of the U.S. retail business, and how SKU rationalization would affect future volume growth. Stewart indicated that OE growth is expected to continue while replacement declines moderate, leading to flat year-over-year global volumes, and that new high-value SKUs are expected to drive low-single-digit global volume growth.

Goodyear reported second-quarter revenue of $4.25 billion, a 4.8% year-over-year decline but slightly above the Zacks Consensus Estimate of $4.23 billion. The company posted a loss per share of $0.61, missing the consensus estimate of a $0.59 loss. Total tire units reached 36.5 million, exceeding the analyst estimate of 35.15 million, with all regional segments—Americas, Asia Pacific, and Europe, Middle East and Africa—surpassing expectations. Net sales in the Americas came in at $2.38 billion, below the $2.48 billion estimate, while Asia Pacific and Europe, Middle East and Africa both beat their respective estimates.

In the 2000 U.S. presidential election, Obion County, Tennessee, was evenly split between Republican and Democratic support. By 2016, roughly 80 percent of voters cast ballots for Donald Trump. Behind this political shift were the closure of a Goodyear tire plant, the area’s largest employer, and the influx of Chinese-made tires. Since opening in 1969, the plant had provided high-paying jobs where high school graduates could earn 100,000 dollars a year including overtime. But from 2004 to 2008, imports of Chinese passenger vehicle tires more than tripled to over 45 million units, forcing the closure of at least four domestic plants. Goodyear announced the shutdown of its Union City plant in February 2011, eliminating 1,900 jobs. The county’s unemployment rate climbed to nearly 17 percent by August of that year, about 2 million dollars in weekly payroll vanished, and an estimated 2,000 to 4,000 jobs at related businesses were put at risk. By 2017, three-quarters of the county’s manufacturing jobs had disappeared, and more than a decade after the plant closure, the unemployment rate remained roughly one percentage point above the statewide level.

Argus lowered its price target on The Goodyear Tire & Rubber Company to $9 from $13 while maintaining a Buy rating, citing challenges including rising raw material costs, higher capital expenditures, slower demand, and low-priced Asian imports. The firm believes Goodyear is addressing these issues through its Goodyear Forward plan, which focuses on divesting noncore assets, reducing debt, cutting structural costs, and prioritizing premium tire segments. JPMorgan also cut its price target on the stock to $9 from $10 on May 11, keeping an Overweight rating.

S&P Dow Jones Indices announced that Allison Transmission Holdings will replace Goodyear Tire & Rubber in the S&P MidCap 400, and Goodyear Tire & Rubber will replace Stellar Bancorp in the S&P SmallCap 600, effective before trading opens on Monday, July 6. The changes are driven by S&P MidCap 400 constituent Prosperity Bancshares acquiring Stellar Bancorp in a deal expected to close July 1. Allison Transmission, classified in the Industrials sector, will be added to the MidCap 400, while Goodyear, in Consumer Discretionary, moves to the SmallCap 600. Stellar Bancorp, a Financials sector company, will be removed from the SmallCap 600.

Goodyear Tire & Rubber has been named the Zacks Bear of the Day as earnings estimates deteriorate sharply. Current year EPS estimates have fallen 157% into deeply negative territory, while next year estimates are down 27%, earning the stock a Zacks Rank #5 (Strong Sell). Sales are projected to decline 3% this year before a modest 2% recovery next year, and the stock is approaching multi-decade lows amid soft tire demand and competitive pressure. Until the company demonstrates sustained volume recovery, margin improvement, and positive estimate revisions, the setup remains weak.

Goodyear's stock has fallen 31.5% over the last six months to $6.17 per share, prompting analysts at StockStory to recommend investors avoid the tire maker. The firm cites three concerns: revenue grew at a mediocre 7% compounded annual rate over five years, earnings per share plunged 56.8% over the last two years, and free cash flow margin averaged negative 1.5% over five years, meaning the company burned $1.48 in cash for every $100 in revenue. With no reliable forward earnings estimates, the stock trades at a forward price-to-sales ratio of 0.1 times. StockStory suggests looking at semiconductor picks instead.