Findlay, Ohio – Cooper Tire & Rubber Co’s net income surged 56 percent to $59.6 million (€53.5 million) and its operating income jumped 29.8 percent to $99.4 million, despite a 15.4-percent slump in sales to $751.8 million for the second quarter, ended 30 June, compared with the year-ago period.
Cooper attributed the sales decline to the absence of Cooper Chengshan Tire (CCT), the company’s former joint venture in China. Cooper sold its interest in the joint venture during the fourth quarter of 2014. The tire maker said CCT contributed sales of $172 million, net of intercompany eliminations, in the second quarter of 2014.
Excluding the impact of CCT, second-quarter 2015 sales rose 5 percent as a result of higher unit volume of $64 million, with increases in both the Americas and International segments, Cooper said. The unit volume increase was partially offset by unfavourable price and mix of $20 million, related to lower raw material costs, and negative foreign exchange of $8 million.
Operating profit — excluding CCT — increased more than 90 percent, resulting from favourable raw material costs of $76 million, higher volume of $14 million, and lower product liability and selling, general and administrative costs of $5 million, Cooper said.
These benefits were partially offset by unfavourable price and mix of $27 million, $13 million of higher manufacturing costs and $7 million of other costs and foreign exchange impact. The higher manufacturing costs were primarily in the Americas segment, where Cooper said it incurred costs related to plant reconfiguration to meet demand for higher value tires, as well as investments in technical capabilities and increased pension expense.