Cooper Reports $52 million Net Income for 2009
Cooper Tire & Rubber Company returned to profit, reporting net income of $52 million (£34.895 million; 38.439 million euros) for the year compared with losses of $219 million (£147 million; 161.890 million euros) in 2008. Annual sales of $2.8 billion (£1.878 billion; 2.086 billion euros) for 2009, were down 4 per cent from 2008.
Fourth quarter results show that Cooper reported a net income of $39 million in the quarter ended 31 December 2009, a $183 million improvement from the same period in 2008. The company also experienced a 28 per cent increase in unit sales, during the quarter. Net sales were $773 million, up $137 million (22 per cent) over the prior year. Operating profit was $60 million for the quarter, a $224 million improvement from a loss of $164 million in 2008.
Company representatives pointed out that the fourth quarter 2009 results included restructuring charges of $12 million, primarily related to the closure of Cooper’s Albany, Georgia facility.
International sales up 56 per cent
Cooper’s International Tire Operations division, (which includes Melksham-based Cooper Tire Europe and the company’s Asian sales and production businesses) reported $274 million in sales, a substantial increase of $98 million (56 per cent) over the fourth quarter of 2008.
The results indicate that despite difficult market conditions, the international business (which accounted for roughly a third of total company sales in the fourth quarter and just over a third during 2009) is continuing on a growth trajectory. International sales for the total year were $994 million, generating operating profit of $73 million, or 7 per cent of net sales. According to the company, the Asian operations are particularly strong, and increased sales volumes by 92 per cent. In addition European operations reported increased unit sales (up 6 per cent) despite the key UK market experiencing a small volume decrease during 2009.
1.5 million Cooper/Kenda tyres to go to Europe in 2010
The fourth quarter results are particularly interesting in light of the US governments import tariff on Chinese produced tyres. In addition to making business difficult for the Chinese tyre makers that had previously been importing tyres into the large US market, this also provided a logistical challenge for Cooper in 2009. Owing to the fact that Cooper produces many of its “bread and butter” products at its Cooper Kenda Tire (Kunshan, China) and Cooper Chengshan Tire (Rongchen, China) joint ventures, this meant Cooper implemented a price increase and “will take tactical actions” to offset the costs of continuing to import 2 to 3 million tyres/year from China in 2010.
As recently as January 2010, Cooper managers told investors that they will continue to manufacture tyres at Cooper Kenda. They play to send 1.5 million tyres produced in this factory to Europe during the course of this year.
North American Tire Operations
North American Tire Operations sales were $566 million during the fourth quarter, up from 2008 net sales of $511 million. Total light vehicle tyre shipments for Cooper’s North America increased 22 per cent, beating the local industry average of 7 per cent (Rubber Manufacturers Association). For the 12 months ended December 2009, the segment generated operating profit before restructuring of $160 million, or 8 per cent, on sales of $2 billion.
Roy Armes, Chief Executive Officer, commented: “During the fourth quarter, we were encouraged by the stronger demand in many markets for our tyres. This improvement allowed the progress we have made to be more visible on the bottom line. In recent years, we have focused on strengthening the foundation of our company in order to leverage opportunities as they emerge and better face challenges as they arise.”