GT

The $1.72B net loss looks catastrophic but is largely non-cash and backward-looking: management attributes it to a full valuation allowance on US deferred tax assets, a goodwill impairment in the Americas, and lower segment operating income — partially offset by gains on selling the OTR, Dunlop and Chemical businesses. Underneath that, operating cash flow actually rose 14% to $796M, and with capex cut 30.5% to $826M the company is roughly cash-flow neutral rather than burning cash. Goodyear Forward, the multi-year restructuring, was completed in 2025: ~$2.2B of divestiture proceeds were used to cut long-term debt 22% to $5.43B (current debt down 37%), and management claims a ~$1.5B annual run-rate margin benefit that should show up in 2026. That self-help, plus a depressed price (0.1x sales, ~$1.90B market cap vs. $3.23B book equity), is the bull case.

The bear case is structural and credible. Revenue fell 3.2% to $18.3B and worldwide tire units dropped 4.7%, with the high-margin replacement segment down 6.3% (US replacement -4.9%, international -7.4%) — a volume problem the cost plan does not fix. CGS rose to 81.6% of sales as $443M higher raw-material costs, $402M higher conversion costs and tariff/transport pressure ate the savings, leaving genuinely thin operating margins (CGS + SAG alone consume ~96.5% of sales). The balance sheet remains stretched at 4.58x liabilities/equity, equity fell 30.9%, and the deferred-tax valuation allowance is a real warning: the company concluded it is unlikely to generate enough US taxable income to use those assets. Note the provided operating-income figure (and the 11.1% derived operating margin) is tagged FY2015 and is inconsistent with the FY2025 cost structure, so I do not lean on it.