From Staff & Wire Reports
FINDLAY, OHIO — Cooper Tire & Rubber Co. released its first-quarter financial results, which showed an increase in net sales of 7 percent, marking a new first-quarter record of $514 million.
In the same period of 2004, net sales were $480 million.
In the quarter ending Mar. 31, sales for North American tire operations increased 8 percent, to $464 million, and unit sales of high performance tires increased 32 percent, Cooper stated.
But first quarter operating profit for the company’s North American Tire operations was $7 million, compared to $13 million in the same period last year. Cooper attributed the decline to the impact of the strike at the company’s Texarkana, Ark., tire plant (Mar. 12-Apr. 11), higher raw material costs and lower unit volumes. “Higher raw material costs reduced North American operating profit by $26 million compared to the prior year,” Cooper stated.
However, unit sales of light truck tires increased by 8 percent, and shipments of Cooper-brand tires increased more than 5 percent. Nevertheless, overall unit shipments were down “as a result of lower shipments in the economy and broadline tire categories,” according to Cooper.
The sale of the company’s automotive division (Cooper-Standard Automotive) resulted in an additional net gain of $6 million. Cooper repurchased 6.4 million shares for $122 million.
Cooper said the quarter’s overall results were impacted by costs of the Texarkana strike, which totaled approximately $7 million pre-tax, the company said. Additionally, the company’s continuing operations had a net loss of $1 million during the first quarter.
Cooper reported international sales of $65 million in the quarter, “essentially even with the first quarter of 2004,” the company said. But Cooper reported an operating loss of $1 million in this quarter.
Cooper also noted that construction in China on its joint-venture plant with Kenda Rubber Industrial Co. is scheduled to begin within weeks.
“Our expansion projects will continue through the end of the year,” said Thomas Dattilo, Cooper’s chairman, president and CEO. “These projects will enable us to produce and sell more of the specialty high performance and large light truck tires in the second half of the year and should help us improve our operating efficiency overall.
“However, we will continue to face challenging market conditions, higher raw material costs and the negative impact from the shutdown in Texarkana in the second quarter and the rest of the year,” he continued. “Because of the strike, our inventory is somewhat lower and less balanced than we would like as we head toward the peak selling season. Supply on some lines will be tight and will likely cause us to lose some sales.”
To learn more about Cooper Tire, go to: www.coopertire.com.
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