ERJ staff report (TB)
Tire Business Staff Report
Findlay, Ohio — Cooper Tire & Rubber Co. reported lower net income for the fourth quarter and full year as net sales achieved records in both periods.
The Findlay-based tire maker said net income in 2012 fell 6.4 percent to $252.4 million (Euro 192.9 million) and declined 61.3 percent in the fourth quarter to $83.1 million.
At the same time, sales grew 2.3 percent to a record $1.06 billion in the quarter and improved 7.5 percent to $4.2 billion for the year.
"A strong fourth quarter capped off a great year," said CEO Roy Armes. "Cooper Tire closed 2012 with a record fourth and full-year net sales and operating profit. Despite challenging global economic and industry conditions, our employees around the world continued to execute our strategic initiatives including diversifying our channel and product mix for light truck tires as well as expanding volumes in the truck-bus radial tire segment."
Cooper, Armes said, also benefited from strong unit volumes, which outpaced the industry in key markets for the year.
Fourth quarter profits were impacted by $25 million in unfavorable price and mix and $20 million in higher selling, general and administrative costs as Cooper continues to invest in expanding distribution networks and promoting Cooper brands, the company said. Higher incentive compensation costs, resulting from higher profits, also affected selling, general and administrative costs, and other costs.
Operating profit for the year and quarter more than doubled to a record $397 million and $124.2 million respectively.
In its North America Tire Operations, Cooper saw sales improve 5.2 percent, to $810 million, and 9 percent to $3.1 million respectively for the quarter and year.
The company said the improved sales results in the fourth quarter resulted from 2 percent higher unit volumes, compared with the 2011 fourth quarter, and higher price and mix.
Segment operating profits soared, rising 257 percent to $103.2 million in the quarter and 282 percent for the year to $295.9 million.
Looking ahead, Armes said Cooper is viewing 2013 with cautious optimism. "We expect economic and industry headwinds to continue and we believe the company will continue to effectively leverage our global footprint to deliver our strategic plan."
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Article from Tire Business