FINDLAY, Ohio – For the quarter ended March 31, 2015, Cooper Tire & Rubber Co. announced that net income attributable to the company was $41 million, or 69 cents per share, compared with $45 million, or 71 cents per share, last year. Net sales were $663 million compared with $796 million in the first quarter of 2014. Cooper said the sales decline was attributable to the absence of CCT, the company’s former joint venture in China, which was divested in the fourth quarter of 2014. CCT contributed $157 million to net sales, net of intercompany eliminations, in the first quarter of 2014. Excluding CCT, first quarter 2015 sales rose 4 percent as a result of higher unit volume of $35 million, which was partially offset by negative foreign exchange of $7 million.
“Our first quarter performance continued the positive trends we saw last year. The Americas segment posted outstanding results, with solid unit volume growth and an operating margin of 15 percent, well above our target. With the strong Americas performance, we came close to last year’s earnings per share despite the absence of CCT in the quarter,” said Roy Armes, Cooper’s chairman, CEO and president.
Outlook
First quarter raw material costs declined approximately 14 percent from the fourth quarter of 2014. The company anticipates that in the second quarter raw material costs will be down slightly from the first quarter, but that they will generally trend slightly higher during the second half of 2015.
The company expects its full year tax rate to be in a range of 30 percent to 35 percent. SG&A expense is forecast to be in a range of $260 million to $270 million in 2015. Capital expenditures for 2015 are expected to be between $205 million and $215 million.
“We expect global tire markets will remain highly competitive,” Armes noted. “Our focus on innovation and new products positions us well in such an environment. The Americas segment volume growth has been solid thus far in 2015, and raw material costs have continued to decline. In the United States, it appears the inventory purchased ahead of the tariff announcements largely has been worked through. We anticipate seeing more normal order patterns and will build inventory in our seasonally weak second quarter for sell through in our typically stronger third and fourth quarters. For the full year, we continue to expect to meet or exceed industry unit volume growth in the U.S.
“In Europe, the economies remain sluggish. While the outlook for tire growth in China is strong longer term, the domestic market currently has been impacted by oversupply due to fewer exports to the U.S. because of the tariffs. For the full year, we anticipate operating profit in our International businesses will be approximately breakeven. For the company overall, we expect to deliver full year operating margin in a range of 8 percent to 10 percent,” Armes concluded.
