Findlay, Ohio – Cooper Tire & Rubber Co. reported a 16.7% jump in net income for the year ended 31 Dec and revealed an extension of its share repurchase programme into 2017.
The firm's net income increased to $248.4 million (€234 million) in 2016, up from $212.8 million the year before, Cooper said during a presentation of its 2016 financials on 17 Feb. Cooper's fourth quarter income improved 14.4% to $69.3 million.
Operating income for the year rose 8.4% for the year to $384 million, or 13.1% of sales.
Sales held relatively flat for the year at $2.92 billion, down slightly compared to $2.97 billion in 2015. For the quarter, sales increased 3.8% to $783.9 million.
Unit volume also increased by 7.7% in the fourth quarter and 2.6% for the year, driven by gains in both its Asia and Latin America regions.
The firm also disclosed it has increased and extended its share repurchase programme by authorising the repurchase of up to $300 million of its outstanding common stock through 31 Dec 2019. The $300 million replaces the $98 million remaining on the authorization from February 2016.
"Through consistent execution of our strategic plan, and the favourable raw material cycle of the past few years, Cooper ended 2016 in a very strong position," President and CEO Brad Hughes said.
"In addition, we delivered unit volumes that were up nearly 8% in the fourth quarter, led by double-digit domestic growth in Asia and Latin America. We also continued to return cash to shareholders through our balanced capital allocation programme."
Hughes, however, cautioned that the firm experienced increased raw material costs toward the end of 2016 and expects those costs to continue rising in 2017. The firm expects that to impact results in the short-term, until they can be offset by price adjustments.
Cooper expects raw material costs to level off later in the year.
Regionally, the firm made gains in its International Tire Operations, reporting a 23% increase in sales to $124 million for the quarter and 2.7% for the fiscal year to $464 million. Cooper said unit volume increased by double digits in both Europe and Asia with domestic unit sales in China up 88% year-over-year from both original equipment and replacement tire sales.
The Americas Tire Operations, however, suffered a 2.4% drop in sales to $694 million for the quarter and a 3.1% decline to $2.6 billion for 2016.
Unfavourable price and mix combined with negative currency impact were the drivers of the decreases, but those were partially offset by $11 million of higher unit volume. Latin America experienced double-digit year-over-year in unit volume growth.