FINDLAY, Ohio (May 5, 2010)—Cooper Tire & Rubber Co. reported net income of $12 million for the first quarter ended March 31, a $33 million improvement from the same period in 2009.
Net sales surged 32 percent to $754 million. Operating profit was $33 million for the quarter, compared with a loss of $16 million in 2009. The Findlay-based tire maker reported net income of 19 cents per share during the quarter on a diluted basis.
Results during the quarter included restructuring charges of $8 million related to the closure of the company's Albany, Ga., factory, a decrease of $7 million from the first quarter of 2009.
“We were extremely pleased with the improved volumes and manufacturing performance achieved during the first quarter of 2010,” said CEO and Chairman Roy Armes. “The increases in volume were the result of better industry conditions combined with successfully positioning the company for growth. The momentum also continued in our operations where our efforts to be more cost competitive were again visible on the bottom line.”
In North America, sales jumped 21.2 percent to $532 million for the quarter. Total light vehicle tire shipments for Cooper's North America segment in the U.S. increased 19 percent, outpacing the total industry shipment increase of 13 percent reported by the Rubber Manufacturers Association. This improvement occurred across nearly all product segments as the company said it was able to increase market share.
Cooper said operating profit of $14 million for the first quarter rose by $17 million when compared with the same period in 2009. Excluding restructuring charges, the improvement from the prior year was $10 million.
Manufacturing operations improved by $29 million, primarily as a result of better capacity utilization. Higher volumes improved results by $22 million.
The company's International Tire Operations reported $294 million in sales, a 77-percent jump from a year ago. This result reflected volume increases partially offset by negative price and mix, Cooper said.
Asian operations increased sales volumes by 102 percent, while European operations reported an increase in unit sales of 20 percent.
Favorable pricing and mix contributed $8 million. Other factors—including lower selling, general and administrative costs—contributed $4 million. Partially offsetting these impacts were a $29 million increase in raw material costs and charges to products liability that reduced profits by $24 million.
Armes called the company's outlook “cautiously optimistic” as raw material costs remain volatile and “have a significant impact on our results.”
“We expect that raw materials will continue to increase and remain elevated in the near future,” he said. “As a result, we announced a price increase in North America on light vehicle tires of up to 7.5 percent, effective June 1…. Our focus remains on prudent management of our critical resources to drive shareholder value.”