Cooper's profit plunges in Q1

Findlay, Ohio - Cooper Tire & Rubber Co.'s profit for the first quarter has plunged by 91.9 percent due to a series of economic challenges including high raw material costs, increased product liability costs and decreased volumes. However, with profits of $1.69 million (Euro 1.10 million), the company managed to stay in the black. In the same period last year, Cooper posted profits of $20.8 million.

 In late April Cooper warned that its most recent quarter would be “considerably below expectations” due to the current difficulties in the economy. Net sales for the quarter rose 1.5 percent to $679.3 million but operating income fell 67.2 percent to $9.55 million from $29.1 million a year ago.

The Findlay-based tyre maker said the sales decrease was the result of lower unit volumes that were partially offset by improved mix. The firm said part of that decline was the result of strategic decisions to eliminate the Starfire brand and exit certain other less profitable lines.

Chairman and CEO, Roy Armes said consumers in North America are driving less because of the economic slowdown, and they're delaying tyre purchases as raw material costs continue to climb. “Despite these headwinds, we are well-positioned and fully committed to our long-term strategy to build a sustainable and cost competitive supply of tyres, profitably grow our business and increase our organisational capabilities,” he said in a statement.

From Tire Business (A Crain publication)