FINDLAY, Ohio—Cooper Tire & Rubber Co. reported an increase in net income and revealed an extension of its share repurchase program into 2017 during a presentation of its 2016 financials on Feb. 17.
The firm's net income increased to $248.4 million in 2016, up from $212.8 million the year before. Cooper's fourth quarter income also improved by $10 million to $69.3 million.
Sales held relatively flat for the year at $2.92 billion, down slightly compared to $2.97 billion in 2015. For the quarter, sales increased to $783.9 million, up from $755.5 million.
Unit volume also increased by 7.7 percent in the fourth quarter and 2.6 percent for the year, driven by gains in both its Asia and Latin America regions.
And finally, the firm disclosed it increased and extended its share repurchase program by authorizing the repurchase of up to $300 million of its outstanding common stock through Dec. 31, 2019. The $300 million replaces the $98 million remaining on the authorization from February 2016.
"Through consistent execution of our strategic plan, and the favorable raw material cycle of the past few years, Cooper ended 2016 in a very strong position," President and CEO Brad Hughes said in a statement. "In addition, we delivered unit volumes that were up nearly 8 percent in the fourth quarter, led by double-digit domestic growth in Asia and Latin America. We also continued to return cash to shareholders through our balanced capital allocation program."
Hughes, however, cautioned that the firm experienced increased raw material costs toward the end of 2016 and expects those costs to continue rising in 2017. The firm expects that to impact results in the short-term, until they can be offset by price adjustments.
Cooper expects raw material costs to level off later in the year.
Regionally, the firm made gains in its International Tire Operations, reporting a 23 percent increase in sales to $124 million for the quarter and a 2.7 percent increase for 2016 to $464 million. Cooper said unit volume increased by double digits in both Europe and Asia with domestic unit sales in China up 88 percent year-over-year from both original equipment and replacement tire sales.
Its Americas Tire Operations, however, experienced a 2.4 percent drop to $694 million for the quarter and a 3.1 percent decline to $2.6 billion for 2016. Unfavorable price and mix combined with negative currency impact were the drivers of the decreases, but those were partially offset by $11 million of higher unit volume. Latin America experienced double-digit year-over-year in unit volume growth.