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You are here: Home1 / News2 / Product News3 / Cooper Sees 3Q Results Fall

Cooper Sees 3Q Results Fall

Date: 10th November 2005 Author: Tyrepress Editors Comments: 0

Driven by operating losses in all of its tyre units, Cooper Tire & Rubber Co finished the third quarter with a net loss of $1 million and sales that nudged just 1 per cent over last year’s results. Analysts described the company’s third quarter as “challenging” and warned that there are “more headwinds to come.”

For the quarter, Cooper posted sales of $558 million, up 1 per cent against the same period in 2004. The net loss, said Cooper, came as a result of lower unit sales, higher raw material costs, and “higher reported interest expense.”

For the first nine months of the year, Cooper had sales of $1.6 billion and a net loss of $9 million, compared to net sales of $1.5 billion and net income of $24 million in the first nine months of 2004.

Cooper’s North American tyre operations had sales of $509 million for the quarter, up 2 per cent versus. the $499 million posted for the third quarter of 2004. Operating profit for the unit was down to $17 million from $24 million last year.

International Tire operations reported quarterly sales of $68 million, up 2 per cent compared to the same period in 2004. Net loss was less than $1 million, said Cooper, compared to a net profit of $3 million last year.

“Our sales were softer than we anticipated throughout the quarter and lagged the markets in July and August,” said Tom Dattilo, Cooper chairman, president and CEO. “We saw improvement and gained market share in September, but it was not enough to overcome the slow start in the quarter. We made good progress in restoring production levels in our plants. Production on an equivalent unit basis was up for the quarter overall and more so in September. Our order fill rates and the availability of critical, high-demand products continued to improve and these will be key factors as we work hard to regain business, particularly with our independent dealers, going forward.”

“While mix and pricing were favourable in the quarter (average transaction prices were up 9 per cent), higher raw material costs and reduced shipments significantly lowered profits,” Deutsche Bank analysts observed.

“Given that Goodyear reported flat North American 3Q shipments last week, we remain concerned that Cooper is losing significant market share. While we continue to believe that CTB could be headed for profit improvement next year, the magnitude of this improvement has come into question as a result of execution problems and market share losses,” the analysts explained, maintaining their hold rating for the company.

Looking forward, Dattilo said: “We are excited about the growth potential in Asia as we complete and begin to leverage our acquisition of a majority interest in Cooper Chengshan Passenger Tire Co and in Cooper Chengshan Truck Tire Co in China.

“We are cautiously optimistic about our opportunities to increase sales in North America in the fourth quarter. However, we still face challenges in our broadline sales and uncertainty remains in the tyre industry specifically and in the broader economy in North America and key regions around the world. Raw material prices and energy costs are still headed higher. In addition, it is very difficult at this point to accurately assess the current and future strength of global tyre markets, particularly in North America, where the impact of higher gasoline prices, declining consumer confidence and the lingering impact of hurricanes in Florida, Mississippi, Louisiana and Texas cannot yet be measured.”

Related news:

  1. Marco Molinari Becomes Executive Vice President, HNI Corporation
  2. Cooper Net Sales up 16 per cent
  3. Dongah Tire & Rubber Acquires Avon Automotive Vibration Business
  4. Alcoa Appoints Kramer to New Growth Initiatives Position
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Related Tags

acquisition, Asia, China, Cooper Chengshan, Goodyear, North America, rubber

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