FINDLAY, Ohio (May 6, 2009)—Cooper Tire & Rubber Co. suffered a net loss of $21.3 million in the first quarter, compared with a $1.69 million profit in the year-ago quarter, as sales dropped 15.9 percent to $571.4 million.
The net loss includes more than $14 million in pre-tax charges related to the firm's decision to close its Albany, Ga., tire plant and $7 million of charges related to the tentative settlement of a retiree medical lawsuit.
Cooper's North American Tire operations recorded a $3.62 million operating loss, compared with an operating profit of $8.14 million a year ago, as sales fell 11.7 percent to $439.3 million.
The company said regional sales were impacted by soft demand in the replacement tire market. The Cooper brand continued to outpace the industry in the U.S. market when compared with the Rubber Manufacturers Association's reported shipments for the industry, according to the tire maker.
The most significant volume decreases were in the economy and light truck tire segments. The private brand distributor channel was “significantly weaker,” but Cooper said it expanded its market presence in Mexico and Canada.
The Findlay-based tire maker has been curtailing production to align inventory with demand. The company said operating profit was positively impacted by lower raw material costs and improved underlying manufacturing operations, in addition to a better sales price and mix.
“There have been several recent signs of stabilization in tire demand, but the near-term outlook is still pressured by the macroeconomic environment,” said CEO Roy Armes. “Raw materials prices are difficult to forecast, but we do not see a return to the extreme price highs of last year. Commodity prices are likely to stabilize during 2009 and then begin to increase as demand for raw materials increases.”