Cooper Reports 16% Increase in Net Sales But Operating Loss in North America - Tire Review Magazine

Cooper Reports 16% Increase in Net Sales But Operating Loss in North America

(Akron/Tire Review) Cooper Tire & Rubber Co. announced that net sales set a new quarterly record of $597 million for the three months ending on Mar. 31, compared to $514 million in the same period of 2005.

Cooper said its acquisition of Cooper Chengshan (Shandong) Passenger Tire Co. Ltd. and Cooper Chengshan (Shandong) Tire Co., Ltd. increased sales by $48 million in the quarter, and higher prices, improved product mix, and higher unit sales volumes in North America and Europe added $39 million.

“While the increase in sales volume generated additional operating profit of $5 million, the company’s continuing operations experienced offsetting cost increases from higher raw material costs, reduced mold and production levels in the company’s Texarkana, Ark., plant and the transition to seven-day continuous operations in the Findlay, Ohio, plant,” Cooper stated in a release. “These cost increases outweighed the combined effects of improved price, improved product and customer mix and the increased sales volume.”

Cooper also said it “tentatively resolved a certain product liability claim” that reduced operating profit by $4 million, net income by $3 million and earnings per share by 5 cents. Overall, the company generated a net loss of 8 cents per share in the quarter, compared to net earnings of 7 cents per share in the first quarter of 2005.

Cooper’s North American tire operations reported sales of $496 million in the quarter, which were up 7% compared to $463 million in the first quarter of 2005. Unit sales of SUV, performance and light truck tires increased by 15%, 17% and 2% respectively, according to the company.

However, operating results for North American tire operations declined year over year as a result of $29 million in higher raw material costs and $5 million in higher utility costs. These costs were “partially offset by $20 million in improved pricing,” Cooper said.

In total, North American tire operations recorded an operating loss of $2 million, compared to operating profit of $6 million in the first quarter of 2005. Including the adjustments to product liability reserves, the segment result was an operating loss of $6 million.

“We had good momentum in terms of sales for the quarter as we outpaced the industry, increased marketshare and improved our overall product mix in North America,” said Thomas A. Dattilo, Cooper’s chairman, president and chief executive officer. “We had strong, record-setting sales in Europe, with improved product offering, availability and expanded distribution. We were pleased with the addition of Cooper Chengshan in China and the solid contribution it is already making to our company. We were also pleased with the dividend on our investment in Kumho.

“However, the North American replacement tire market remains very competitive and raw material prices continue to impact our results,” Dattilo said. “The price increases we have instituted in the past several months have fallen short of covering rising material costs."

More price increases will be necessary if natural rubber and oil prices remain elevated, according to Dattilo.

You May Also Like

Identifying The Correct Alternator Pulley

As the expert in the video explains, the overrunning alternator decoupler (OAD) pulley serves important purposes that a basic pulley cannot replicate.

Litens alternator

Proper part selection is crucial when repairing a vehicle to ensure optimal performance and longevity. This was the situation the technician and shop owner faced in this video when an incorrect alternator was ordered for a customer's repair. While the alternator itself may have functioned, it was missing a key component - the overrunning alternator decoupler (OAD) pulley. As the expert in the video explains, the OAD pulley serves important purposes that a basic pulley cannot replicate.

OTC Debuts BT12, BT30 Heavy-Duty Bottle Jacks

OTC’s new heavy-duty bottle jacks provide 12 and 30 ton capacities for lifting on the road or job site.

VIP Tires Donates Nearly $3,000 to Marshfield School Committee

VIP Tire’s “Oil Changes for Education” program raises funds for local schools.

Nokian Tyres, Powdr Partner to Plant Trees

When you buy a season pass to a Powdr resort this spring, a tree will be planted on your behalf through their partnership with Nokian Tyres.

Nokian POWDR
How Much do Customers Really Care About Tire Noise Mitigation?

Even if they aren’t driving an EV, some of your customers might be sensitive to road noise in the cabin, and point to tires as a culprit.


Other Posts

Black’s Tire Charity Golf Tournament Raises $207K

Black’s Tire members gathered for its 20th annual event, returning to the golf course to raise funds for Boys and Girls Homes of North Carolina.

TIA to Offer Commercial Tire Instructor Training

The four-day class covers all aspects of medium/heavy truck tire service.

ATD Sponsors First Responder Appreciation Day

ATD supported the Gary Sinise Foundation’s event celebrating first responders and awarded grants to local fire and police departments.

Ohio Tire & Auto Association Donates $3K at Annual Golf Outing

OTAA’s annual golf event raised funds for AACF while connecting Ohio Tire & Automotive Association members.

2023 OTAA-golf-outing