S&P raises Goodyear outlook to positive

Standard & Poor's said it revised its outlook on Goodyear Tire & Rubber Co. to positive from stable, reflecting the company's announcement on March 23 that it has agreed to sell its Engineered Products business for almost $1.48 billion and its expectation that Goodyear will apply a significant amount of the proceeds to repay debt.

Goodyear's financial profile will improve from debt reduction and a modest upgrade could occur if profitability and cash generation in the company's North American tire business strengthens, the agency said.

In addition, S&P said it affirmed its B+ long-term and B-2 short-term corporate credit ratings and other ratings on Goodyear.

According to the agency, the ratings on Goodyear reflect its aggressive financial risk profile, characterized by low earnings in North America, a leveraged capital structure and significant, albeit declining, underfunded employee benefit liabilities while these factors more than offset the company's business strengths, including its position as one of the three largest global tire manufacturers, its good geographic diversity, its strong distribution and its well-recognized brand name.

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