Cooper earns $140 million on record sales
Cooper Tire & Rubber Co. recorded net income of $140 million on record net sales of $3.4 billion for the year ended Dec. 31, 2010. That compares to income of $52 million on sales of $2.8 billion for fiscal 2009.
The company's income-to-sales ratio increased from 1.8% to 4.1%.
Cooper says the change in net income included an improvement of $56 million from discontinued operations. An 8% increase in unit shipments and higher pricing drove full-year net sales.
Operating profit totaled $188 million, a 5.6% increase over the operating profit of $156 million in 2009.
Fourth quarter results
For the fourth quarter, Cooper posted income of $40 million -- an increase of $1 million from the same period in 2009 -- on net sales of $920 million (compared to $773 million in 4Q 2009).
Results during the quarter included restructuring charges of $1 million, related primarily to the closure of the Albany, Ga., facility. This compares with charges of $12 million during the fourth quarter of 2009.
Operating profit for the quarter dropped from $60 million to $55 million, which the company says was the result of higher raw material prices ($138 million) that were partially offset by better price and mix ($115 million).
"We were able to deliver positive results during the fourth quarter despite the beginnings of rapid increases in raw material costs, particularly natural rubber," says CEO Roy Armes.
"Demand for our products continued to be very strong and we were able to run the manufacturing facilities efficiently to deliver improved manufacturing results. Our ability to ship more tires was limited by the inventory we had available for sale during the quarter."
North America Tire Operations
For the full year, the segment had sales of $2.4 billion, up 20.8% year-to-year. Sales in North America represent 72.1% of total sales.
Operating profit also was up, from $111 million to $131 million, an 18% increase.
For the fourth quarter, the segment achieved net sales of $669 million, up 18% from 2009 net sales, and operating profit of $42 million, up 7.7%.
Cooper says its total 4Q light vehicle tire shipments in the United States increased by 0.4%. "The segment's ability to meet strong demand for its products was constrained during the fourth quarter by the inventory it had available for sale."
Armes on 2011
"In 2011, we intend to produce 10% more units than we did in 2010 to help meet this strong demand," says Armes.
"The largest challenge currently facing the company is the increase in natural rubber prices, which increased more than 75% during the last four months. Raw material costs have increased between 15% and 20% sequentially from the fourth quarter of 2010 to the first quarter of 2011. We expect raw material costs to remain at elevated levels after the first quarter... however, the rate of increase should begin to slow during the second quarter.
"We continue aggressively taking every action possible to internally offset these cost increases, but it was necessary to announce a price increase in the United States effective March 15, 2011, by a weighted average of 8% to 9% with the amount of increases varying by product."
Cooper's management team will discuss the financial and operating results for the quarter in a conference call today at 11 a.m. EST. 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. For additional information on Cooper, visit , www.facebook.com/coopertire or twitter.com/coopertire.