Connect with us

Financial

Cooper Tire & Rubber Co. Reports 2019 Net Income Of $96M

Cooper Tire & Rubber Co. has reported full year 2019 net income of $96 million, or diluted earnings per share of $1.91, compared with $77 million, or $1.51 per share, last year.

Advertisement
Click Here to Read More
Advertisement

Full Year 2019 Highlights:

  • Unit volume decreased 3.9 percent compared to 2018
  • Net sales were $2.75 billion compared to $2.81 billion the prior year
  • Operating profit was $174 million, or 6.3 percent of net sales, compared to $165 million, or 5.9 percent of net sales, in 2018

Fourth Quarter Highlights:

  • Unit volume decreased 2.6 percent compared to the fourth quarter of 2018
  • Net sales decreased 2.6 percent to $750 million
  • Operating profit was $64 million, or 8.5 percent of net sales, compared to $25 million, or 3.2 percent of net sales, in 2018
  • Net income was $51 million, or $1.02 per share

“Cooper has made a great deal of progress on the strategic initiatives we outlined at our May 2018 Investor Day,” said President and CEO Brad Hughes. “With a focus on the consumer, we have continued to execute a physical and e-commerce retail expansion effort that now has Cooper products available in the top-five tire retailers in the U.S. We have improved our product mix through a continued focus on high value-add tires, forged ahead into the original equipment (OE) space with Mercedes-Benz as a key customer, and delivered a strong cadence of compelling new products. To enhance the competitiveness of our global manufacturing footprint, we shifted production from our Melksham facility to other lower cost plants, acquired full ownership of our Mexico facility to further develop the full potential of the plant, and opened a new truck and bus radial tire (TBR) joint venture plant in Asia. In addition, we have enhanced our TBR tire business by launching the Cooper brand, which won key OE fitments with Blue Bird school buses. Cooper is also building out a digital marketing capability and increasing brand awareness through a new advertising campaign.

Advertisement

“Our teams around the globe are aligned in executing our strategic plan and delivered improved operating profit and operating profit margin, as well as increased cash flows in 2019, allowing us to continue to fund our strategic initiatives. All of this was achieved in the face of net new tariffs and restructuring costs resulting from our footprint actions.

“Focusing on the fourth quarter, our operating results were in line with our expectations. Operating profit margin improved on both a year-over-year and sequential basis. We saw volume declines in all regions as global tire markets continued to be affected by unfavorable economic and political factors. Yet, in our core U.S. market, light vehicle tire volume was in line with the industry, and in Asia, third party sales were up compared to last year. We have the momentum to continue to make even greater progress on our strategic initiatives and derive even more positive results in 2020. It’s an exciting time of positive transformation at Cooper, and we look forward to building on what we have achieved to deliver value in 2020 and beyond.”

Full year 2020 expectations include:

  • A modest global unit volume increase compared to 2019, including in the U.S.
  • Operating profit margin that improves during the year, with the second half better than the first half, and the full year exceeding 2019.
  • An effective tax rate, excluding significant discrete items, of approximately 25 percent.
  • Capital expenditures that will range between $260 and $280 million. This includes investments in Serbia and Mexico.

Management anticipates first half 2020 operating profit margin to be impacted by typical seasonality and certain unique items which are included in the full year outlook:

  • Approximately $10 million of restructuring charges related to the transition at the company’s Mexico manufacturing facility, which will occur primarily in the first quarter of 2020.
  • Higher manufacturing costs in Latin America, Europe and Asia related to both market conditions and the company’s footprint actions.
  • Higher SG&A expenses, including the impact of the timing of advertising spend.
  • Expectations do not include tariff rate changes or additional tariffs that continue to be considered, but have not yet been imposed. The outlook for 2020 also does not include the impact of the coronavirus.

Advertisement

Loading Post...

Loading Post...

Loading Post...

Advertisement

POPULAR POSTS

Distribution

CARB Fines Major Online Automotive Parts Retailer $1M For Selling Illegal Aftermarket Parts In California

Financial

Motorcar Parts Of America Reports Fiscal 2016 Second Quarter, Six-Month Results

Financial

O’Reilly Automotive Reports Q4, Full-Year 2019 Results

Distribution

Synchrony Financial, Pep Boys Extend Consumer Financing Program

Connect