Global tire manufacturer Goodyear (NASDAQ: GT) reported Q1 CY2026 results topping the market’s revenue expectations, but sales fell by 8.7% year on year to $3.88 billion. Its non-GAAP loss of $0.39 per share was 8.5% above analysts’ consensus estimates.

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Company Overview

With its iconic blimp floating above major sporting events since 1925, Goodyear (NASDAQ: GT) is one of the world's largest tire manufacturers, producing and selling tires for automobiles, trucks, aircraft, and other vehicles, along with related services.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Goodyear grew its sales at a mediocre 7% compounded annual growth rate. This was below our standard for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Goodyear’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.9% annually.

This quarter, Goodyear’s revenue fell by 8.7% year on year to $3.88 billion but beat Wall Street’s estimates by 2.5%.

Looking ahead, sell-side analysts expect revenue to decline by 2.2% over the next 12 months. While this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

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Operating Margin

Goodyear was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.5% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Goodyear’s operating margin decreased by 2.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Goodyear’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q1, Goodyear generated an operating margin profit margin of 2.4%, up 2.2 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Goodyear’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Sadly for Goodyear, its EPS declined by more than its revenue over the last two years, dropping 56.8%. This tells us the company struggled to adjust to shrinking demand.

Diving into the nuances of Goodyear’s earnings can give us a better understanding of its performance. A two-year view shows Goodyear has diluted its shareholders, growing its share count by 1.1%. This has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q1, Goodyear reported adjusted EPS of negative $0.39, down from negative $0.04 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 8.5%. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Goodyear’s Q1 Results

We were impressed by how significantly Goodyear blew past analysts’ EBITDA expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. Investors were likely hoping for more, and shares traded down 1.6% to $7.18 immediately following the results.

So should you invest in Goodyear right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).