Findlay, Ohio — Cooper Tire & Rubber Co. reported lower operating income and sales for the quarter and half year ended 30 June, as challenging economic environment is set to continue for the rest of the year.
For the quarter ended 30 June, Cooper's operating income fell 3.3% to $31.7 million (€28.4 million) on 2% lower sales of $679.1 million, for a 4.5% earnings ratio, the company said in a 29 July statement.
Cooper attributed the earnings’ drop to costs related to elevated tariffs on products imported into the US from China, lower production volumes and higher operating & liability costs.
The company was also negatively impacted by $2-million restructuring costs related to Cooper Tire Europe's decision to cease light vehicle tire production in Melksham.
Offsetting these costs were $17 million of favourable price and mix and $15 million of favourable raw-material costs.
Cooper attributed the sales drop to the impact of lower unit volume ($34 million) and unfavourable foreign currency exchange rates ($6 million), partially offset by $21 million of favourable price and mix.
Net income plunged 41.2% to $8.82 million.
For the second half, Cooper expects headwinds such as the increased US tariff costs, which impact Cooper's medium truck tires; and the delayed timing of anticipated commercial truck tire price increases.
In addition, the company expects second half weakness in the China new vehicle and European replacement tire markets.
Despite the first-half results and the headwinds, Cooper said it expected to report an improved operating profit margin throughout the year, matching or exceeding the 5.9% reported last year.