Cooper posts higher sales, but strike puts Q1 into loss
Findlay, Ohio--While Cooper Tire & Rubber Co. posted a 7.1-percent gain on net sales in the first quarter, the Findlay-based tyre maker's net income from continuing operations fell to a loss of $1.04 million, in part from a strike at its Texarkana, Arkansas, plant.
Cooper reported record net sales of $514.1 million, up from $480 million last year. But the net loss in the quarter was in contrast to a profit of $2.18 million in last year's period. Counting discontinued operations--the company sold its Cooper-Standard Automotive unit last year--Cooper's net income dropped a hefty 78.5 percent to $5.22 million from $24.3 million in the same 2004 period, although the 2005 results included an additional $6.3 million gain on the sale of Cooper-Standard.
Cooper said its quarterly results were impacted by the work stoppage in Texarkana, which began March 12 but was resolved with the ratification of a new contract by a 708-632 vote on April 10. The tyre maker said costs related to the strike reached about $7 million during the quarter.
"We will continue to face challenging market conditions, higher raw material costs and the negative impact from the shutdown in Texarkana in the second quarter and the rest of the year," said Tom Dattilo, Cooper chairman and CEO.
"Because of the strike, our inventory is somewhat lower and less balanced than we would like as we head toward the peak selling season. Supply on some lines will be tight and will likely cause us to lose some sales."
He added that the total effect of the strike, including direct costs and lost sales, could reach 20 cents per share in the second quarter. Second-quarter earnings are forecast at 1-5 cents per share.
From Rubber & Plastics News
Press release from Cooper