Cooper sales increase by 20%, profit by 33%
Cooper Tire & Rubber Co. posted net income of $16 million on net sales of $906 million for the first quarter ended March 31, 2011. That compares to income of $12 million on sales of $754 million for the same period in 2010.
Operating profit was $32 million for the quarter, down 3%.
Cooper says it was successful in improving price and mix ($128 million), lowering products liability expenses ($19 million), increasing volumes ($11 million), lowering restructuring costs ($8 million) and improving manufacturing ($5 million), which contributed favorably to the results.
Higher raw material costs ($164 million) and higher selling, general and administrative, and other costs ($8 million) offset some of those gains. The net impact of these changes was a decrease in operating profit of $1 million.
“Despite elevated raw material costs, we continued making improvements to our underlying operations and delivered solid operating profits during the quarter," says CEO Roy Armes. "In addition to the work we have done to improve costs, we have implemented price increases in a variety of ways around the globe to address these pressures.
"We still intend to produce 10% more units in 2011 than we did in 2010 to help meet the continued strong demand for our products. We expect raw material costs to remain at elevated levels after the first quarter, but persistent volatility can make it difficult to accurately predict movements in raw material prices.
"We have forecasted that our raw material index is likely to be sequentially higher, by between 10% and 15%, during the second quarter," he says. "We believe increases to the raw material index should begin to decelerate during the third quarter.
"The investments we made during the quarter to increase ownership at the Mexican and Asian operations are great examples of our dedication to increasing our presence in these fast-growing markets and one of the ways we will continue making forward progress as a company.
"Our focus is on efforts that will continue to better position the company to improve shareholder returns, and we remain optimistic about our opportunities to further improve results by successfully implementing tactics that will profitably grow the top line, improve our global cost structure and improve organizational capabilities."
Cooper’s management team will discuss the financial and operating results for the quarter in a conference call today at 11 a.m. Eastern Standard Time. Interested parties may access the audio portion of that conference call on the investor relations page of the company’s Web site at www.coopertire.com.
(Cooper has posted a summary presentation of information related to the quarter on its Web site. To view it, click here.)