Cooper Tire & Rubber Co. posted net income of $38.2 million on net sales of $888.7 million for the second quarter ended June 30, 2014. That compares to income of $35.5 million on sales of $884.1 million for the same period last year.
Operating income increased 10.7%, from $69.1 million to $76.6 million. The increase resulted primarily from favorable raw material costs ($67 million); higher unit volume ($13 million); favorable selling, general and administrative costs ($10 million); and manufacturing cost efficiencies ($7 million), which more than offset unfavorable pricing and mix of $85 million. The 2013 operating profit included $7 million in costs related to the then-pending merger with Apollo Tyres Ltd., which subsequently did not occur.
The company's net income-to-sales ratio was 4.3%.
Cooper's North American operation, which represents 72% of total sales, posted an operating profit of $65 million, up 9.5% over results from 2Q 2013. Sales totaled $639 million, up 2.5%. Unit shipments increased 9%; according to the company, the unit volume increase was driven primarily by sales of new, higher margin light truck and SUV products introduced in the last year.
Cooper's total light vehicle tire shipments in the United States increased 7% during the quarter. In comparison, the Rubber Manufacturers Association (RMA) estimates total industry shipments were up only 3%.
”We continued our strong performance in what is usually a seasonally weak quarter, posting very good volume growth in most geographic regions," says Roy Armes, Cooper’s chairman, CEO and president. "Pricing decreased, mainly driven by lower raw material costs, but the 10% global unit growth, along with our focus on cost reductions, helped us exceed last year’s operating margin."
For the six-month period ended June 30, 2014, Cooper recorded net income of $83.6 million on net sales of nearly $1.7 billion. That compares to income of $91.5 million on sales of more than $1.7 billion for the first half of 2013.
Cooper's 1H operating profit in North America was a record $133 million.