FINDLAY, Ohio — Cooper Tire & Rubber Co. has reported operating profit of $71 million for the quarter ended Sept. 30, a $118 million improvement from the same period in 2008. Net sales for the period were $803 million, an increase of $9 million from the prior year. Net income was $47 million for the quarter, a $102 million improvement from a loss of $55 million in 2008. The company reported net income of 77 cents per share during this quarter on a diluted basis.
Cooper said improved results were driven by lower raw material costs and supported by the company’s continued manufacturing improvements and improved utilization of capacity. These positive impacts were offset by unfavorable price and mix and restructuring charges. Quarterly sales volumes showed improvement and had a minor positive impact on a year-over-year basis.
The company ceased production at its facility in Albany, Ga., during the quarter and incurred related restructuring costs of $13 million, or 22 cents per share. Operating profit was a substantial 8.8 percent of net sales during the quarter, compared with an operating loss of 5.9 percent during the third quarter of 2008.
The company’s cash position of $410 million as of Sept. 30, was an increase of $162 million from Dec. 31, 2008, and was achieved while the company reduced debt by $77 million during the first nine months of 2009. This was primarily the result of inventory reductions and improved operating results, according to the company.
Through the first nine months of 2009, Cooper generated $2 billion in net sales. Operating profit was $96 million during the same period, compared with operating losses of $53 million in 2008.
Roy Armes, chief executive officer, commented, "The positive results during the quarter were the outcome of successfully executing on our plan in an environment where a positive price to raw material relationship existed. This resulted in extremely positive margin growth and an operating profit during the quarter of nearly 9 percent. Raw material prices have escalated in recent months, but we do not expect a return to the high levels of 2008. In this environment, our operating results will be significantly affected by our ability to hold or increase prices.
"We will continue to focus on improving our global cost structure, profitably increasing the top line, and enhancing organizational capabilities as the key elements of our strategic plan. To deal with the tariffs announced by the United States government, we have implemented selective price increases and are executing tactical sourcing moves to mitigate the impacts while meeting our customers’ needs.
"Our international operations have continued to grow in importance to our organization while the North American segment continues to explore profitable opportunities to grow. Cooper employees around the globe continue to focus on changes that will make us a stronger organization. Our greatest concern in the near-term is raw material price volatility.
"This is an exciting time as we begin to see the benefits of changing our competitive dynamics. However, we are in a very fluid industry and environment. We believe the changes we have made are a great start in positioning us for a more consistent level of profitability, and we continue to develop in a way that will make us even stronger. The progress we have seen gives us optimism about what this team can achieve over the long-term."
