Sales Up, But Cooper Still Posts Larger Loss
(Akron/Tire Review) Despite seeing positive returns from its new operations in China, Cooper Tire & Rubber Co. still posted a large loss for fiscal year 2006. The company reported full-year sales of $2.7 billion, up 24% from the year prior, but a net loss of $79 million, compared to a 2005 net loss of just $9 million.
Cooper reported consolidated net sales of $739 million for fourth quarter of 2006, a quarterly revenue record and up 29% year-over-year.
The tiremaker said the fourth quarter surge was “driven primarily by the addition of the operations of Cooper Chengshan (Shandong) Passenger Tire Co. and Cooper Chengshan (Shandong) Tire Co.” Cooper acquired controlling interest in those businesses in February 2006.
Contributing to the fiscal year downturn was $52 million in goodwill and “intangible asset” write-offs during the quarter.
Cooper’s domestic tire operations posted 2006 sales of $2.1 billion, up from 2005’s sales of $1.96 billion, and an operating loss of $4 million compared to an operating profit of $33 million in the full year 2005.
Commenting on the quarter’s results, Cooper’s President and Chief Executive Officer Roy Armes said,
“We are pleased with the improvement in our North American Tire operations,” said Cooper president and CEO Roy Armes. “Productivity increased and total variable costs declined as a result of a solid team effort to deliver on our profit improvement goals. Sales were relatively strong as total unit volume increased and we gained marketshare in virtually every product category.
“We have made good progress but we have lots of opportunity to achieve the kind of results we are really capable of delivering,” Armes said. “Our Chinese operations have a lot of potential and now that we started production in our Cooper Kenda joint venture plant, we expect to see progressive improvement in our international segment results throughout 2007. I am confident in our team and our ability to execute our plans. I believe we are well positioned for continued, significant improvement in 2007.”