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Analysts: First Quarter Tough for Cooper

(Clacton, U.K./Tyres & Accessories) Cooper Tire & Rubber’s passenger replacement tyre volumes declined 4.3% year-on-year in the first quarter of 2006, Deutsche Bank analysts have reported.

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While this was slightly better than the market watchers feared, raw materials rose by more than expected, ruling out any advantages.

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Even the $4.3 million Cooper is believed to have gained as a dividend from its shares in Kumho was not enough to offset the higher raw material costs.

“Based on spot prices for natural rubber (which accounts for 20% of raw material costs for tyre manufacturers), we anticipate additional pressure on tyre companies’ margins in the second quarter,” the analysts commented.

The Deutsch Bank analysts noted: “Q1 is a seasonally tough quarter from a cash-flow perspective.”

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