FINDLAY, Ohio—Cooper Tire & Rubber Co. reported lower net income, operating profit and net sales for the first quarter due largely to increased raw materials costs.
The company reported a net income of $31 million compared to $59 million in 2016, according to its financial statement of April 27.
"As anticipated, the first quarter was impacted by a dramatic increase in raw materials costs," said Brad Hughes, president and CEO of Cooper Tire.
Operating profit reduced to $49 million, down from $91 million the year before, reflecting the pressure of the raw materials cost and product pricing environment. That decrease is a result of $42 million in unfavorable raw materials costs, $10 million of higher manufacturing costs, $5 million lower unit volume, $3 million of other costs, $2 million of negative foreign currency impact and $2 million of unfavorable SG&A expenses. Those higher costs were partially offset by the $22 million reversal of preliminary truck/bus tire tariffs incurred in 2016.
Net sales reduced to $643 million, a 1 percent change from last year, citing lower unit volume and negative foreign currency impact. Those were partially offset by favorable price and mix, primarily due to net price increases.
Overall, Cooper's first quarter unit volume was up 2.9 percent year over year. Unit volume in the Americas was down 7.4 percent, driven by a decrease of 9.3 percent in North America. The shift in U.S. unit sales came as a result of the timing of price increases and aggressive promotional activity by competitors, as well as overall weaker industry sell-out volumes, according to Hughes.