Moody's lowers Goodyear's debt rating; Goodyear responds
Moody's Investors Service downgraded Goodyear Tire & Rubber Co.'s long-term debt rating from Baa3 to Ba1 and short-term debt rating from Prime-3 to Nothing on Friday.
"The downgrade reflects Moody's expectation that Goodyear's recent weak financial performance will continue through 2002 due to flat overall unit demand and an unfavorable shift in sales mix," Moody's said in an official release.
"Some improvement in the company's financial performance is anticipated in 2002 due to positive pricing initiatives, cost reductions and improved capacity utilization.
"Nevertheless, cash flow generation will remain constrained until global tire volumes return to more normal demand levels."
A Goodyear spokesman said the downgrading was similar to Standard & Poor's Corp.'s downgrade in January.
"We are disappointed but not surprised by Moody's rating action. We have plans in place to improve our profitability throughout the year, and there is little immediate impact from this action."
On Friday, Goodyear's stock was trading at $19.25 a share. At the close of today, it was up to $19.44 a share.