Findlay, Ohio – Cooper Tire & Rubber Co. reported net income of $59 million (€53 million) for the first quarter of 2016, up from $41 million in 2014.
The increase came despite a 2 percent drop in sales to $650 million, from $663 million in 2015. Operating profit increased 29.5 percent to $91 million, up from $70 million, and operating margin increased 3.4 percent to 14 percent for 2016.
“Cooper is off to a strong start in 2016,” Roy Armes, chairman, CEO and president, said in a statement. “Our first quarter operating margin performance was excellent and continues the positive results we delivered in 2015.”
Armes highlighted the firm’s Americas Tire Operations, which posted a 17.8 percent increase in operating profit to $106 million despite a 3.2 percent drop in sales to $579 million, compared to $599 million in 2015.
The increase in operating profit was attributed to favourable raw material costs and $6 million in lower product liability costs, but that was offset by $5 million unfavourable manufacturing costs, $5 million of unfavourable SG&A costs, $5 million of negative currency impact and $2 million from lower unit volume.
The firm added that unit shipments decreased 0.5 percent compared to 2015 with total light vehicle tire shipments in the US decreasing 1.4 percent primarily caused by a decline in private label shipments.
Cooper’s International Tire Operations posted a 3.6 decrease in net sales to $103 million and an operating loss of $2 million, which actually was a 36.6 percent increase compared to a loss of $3 million in 2015.
The firm attributed the results to an unfavourable price mix and $3 million from negative foreign currency impact, partially offset by $5 million from a 4.6 increase in unit volume. Cooper attributed the higher volumes to increased sales for original equipment and replacement tires in China.
Cooper said it continues to make progress on its planned acquisition in GRT, a joint venture in China to produce truck and bus radial tires for global markets. It said the transaction is projected to close in the third quarter of 2016, pending permits and approvals by the Chinese government.