AKRON, Ohio, Dec 26 (Reuters) - Goodyear Tire & Rubber Co. , the largest U.S. tiremaker, said on Thursday that a credit rating downgrade from Standard & Poor's puts the company at the minimum rating needed to access certain accounts receivable financing programs.
The company, based in Akron, Ohio, also said its North American replacement tire shipments fell in November, and again lagged industry averages.
S&P on Tuesday cut Goodyear's credit and senior unsecured debt ratings two notches to "BB-minus," its third highest "junk" grade, from "BB-plus," on concern about Goodyear's ability to boost U.S. profits. Goodyear had about $5 billion of debt on Sept. 30, S&P said.
Goodyear said the downgrade "puts the company at the minimum required rating, but does not affect its ability to access these (accounts receivable) financing arrangements." Accounts receivable are money owed for goods bought on credit.
The balance outstanding on the program was $895.9 million as of Sept. 30, Goodyear spokesman Keith Price said.
Chief Operating Officer Robert Keegan, who on Jan. 1 becomes Goodyear's chief executive officer, said in a press statement that Goodyear is "disappointed" in S&P's downgrade.
"The year 2003 clearly will be a transition year for Goodyear, as we take the steps necessary to properly position the company," he said. "We believe that these steps will result over time in a restoration of our credit ratings to investment-grade levels."
Goodyear in October said its North American tire operation, which accounts for nearly 50 percent of sales, was the only one to report lower third quarter profits, as operating profits fell to $10.1 million from $87.9 million a year ago.
Overall third quarter net income more than tripled from a year ago to $33.7 million, or 20 cents per share, it said.
Moody's Investors Service said in November it may cut Goodyear's "Ba1" long-term debt rating, equal to S&P's "BB-plus" ratig.
U.S. SALES LAG AGAIN
Goodyear said its North American replacement tire shipments in November fell more than the 1 percent industrywide decline.
The company said North American shipments of commercial replacement tires in November rose 5 percent from a year ago, and that Goodyear's shipments rose by a smaller percentage.
Price said Goodyear would not disclose exact figures for its own shipments.
Sales of replacement tires have slumped this year as consumers postponed purchases because of the weak economy.
The recall of tires from Bridgestone Corp.'s Firestone unit boosted sales a year ago.
In the European Union, Goodyear said commercial and consumer replacement tire shipments in November fell more than industrywide averages. Consumer tire shipments fell 4 percent industrywide while commercial tire shipments were unchanged, it said.
EU shipments fell 2 percent for original equipment consumer tires and rose 1 percent for original equipment commercial tires, Goodyear said. Goodyear's consumer tire shipments fell below industry levels, and commercial tire shipments exceeded industry levels, it said.
Goodyear shares closed Tuesday on the New York Stock Exchange at $6.63. They have fallen 72 percent this year.