ERJ staff report (TB)
Tire Business Staff Report
Findlay, Ohio - Cooper Tire & Rubber Co. reported record sales and earnings for quarter and nine months ended 30 Sept, prompting management to reiterate its belief that "we are on the right path toward continued profitable growth for our company."
The Findlay-based tyre maker reported record operating income for the quarter of $130 million (Euro 101 million), a 174.6 percent jump over the 2011 period. Sales were up 4 percent to $1.1 billion, yielding an earnings ratio of 11.8 percent. Net income quadrupled to $74.1 million.
Cooper said third quarter profits were impacted positively by lower raw material costs of $144 million, volume increases totalling $9 million and $7 million in manufacturing efficiencies.
However, profit contributors were partially offset by $36 million in unfavorable price and mix and $28 million in higher selling, general and administrative costs to invest in the company's expanding distribution networks and promoting the company's brands, according to Cooper.
The company also saw $7 million in higher product liability costs and $7 million in "other" costs -which included higher pension expenses,. Higher incentive compensation costs, resulting from higher profits, affected selling, general and administrative costs and other costs, the firm said.
For the nine months, operating income was up 163.1 percent to $272.7 million, while net income jumped 231.4 percent to $147.4 million. Sales climbed 9.4 percent to $3.14 billion.
Revenue in North America was up 7 percent to $816 million on 4-percent higher unit sales and higher sales and an improved product mix. By comparison, U.S. consumer tyre shipments fell 3 percent, Cooper said.
Segment operating income was up nearly fivefold to $105 million.
Cooper CEO Roy Armes said the third quarter financial results included several record performances for the company, and he chalked that up to its initiatives to improve efficiency, which helped lower costs while the company - along with the industry - benefitted from lower raw material costs.
Regarding the rest of fiscal 2012, Mr. Armes said: "We are confident that our ability to execute our strategic plan will drive results and build on the positive momentum we've established over the last several quarters. Still, we are approaching the future with caution regarding several factors that we cannot control, such as the challenging global economic environment and factors specific to the tyre industry, which contribute to uncertainty about the near-term future."
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Article from Tire Business