Cooper Results Have Implications on Goodyear
Cooper’s recent 2005 results may have shown full-year losses, but they also show that the company’s inventories would have been $125.6 million (41 per cent) higher “had they used FIFO instead of LIFO.” The results have implications on the way other company’s results are interpreted. “As a result, we would expect a substantial earnings impact from raw material cost inflation in the quarters ahead,” Deutsche Bank analysts said referring to Goodyear.
Meanwhile Standard & Poor’s put Cooper Tire & Rubber Co. on credit watch yesterday, after the company reported a 2005 net loss of $9 million. Standard & Poor’s said the move was due to concerns Cooper’s future financial results will not meet expectations.
The credit rating agency said it expects Cooper to have improved manufacturing efficiencies and increased sales in 2006, but does not think that will strengthen its overall operating results.