Cooper lowers earning expectations amid declining replacement sales
Cooper Tire & Rubber Co. predicts lower earnings than originally anticipated as it prepares to release official first-quarter results April 19.
In February, the company estimated earnings, based on expected volume declines in both its tire and automotive businesses, would equal 21 cents per share. However, volume has declined more than anticipated since then, decreasing operating profit.
Replacement tire sales decreased 8% vs. first-quarter 2000 results, "the greatest rate of year-over-year decline since 1980," according to the company. Also, Cooper has made additional accounting adjustments "relating to retirement plan and other benefit costs, and for litigation costs and product liability settlements, due in part to greater activity following the Firestone recall."
Cooper readjusted its net earnings for the first quarter to between one cent and five cents per share. "The company anticipates an improvement in volumes in both segments of its business during the second quarter, even if overall economic conditions do not improve," says Tom Dattilo, chairman, CEO and president of Cooper Tire.
Cooper's fourth-quarter 2000 sales of $820 million were 17% higher than they were for the same period in 1999.
Cooper recorded a record $3.5 billion in net sales last year, a 58% increase over 1999's $2.2 billion total. Operating profit for the year 2000 was $310 million, a 30% jump from $239 million during the previous year.
The company's year 2000 net income totaled $133 million, a 1.6% decrease from 1999's record levels.
Cooper's stock price closed at $11.05 on Friday.