Cooper Tire & Rubber Co. reported third-quarter net income of $23 million on net sales of $839 million. Both were increases over third-quarter 2001 results.
The $23 million in net income was 215% higher than the $20 million loss recorded during the same period last year, when the company took charges relating to a proposed settlement of class action litigation.
Excluding the charges, net income was up 28%.
"Our automotive components business is really beginning to come together, just as we planned and as we have been saying," says Tom Dattilo, Cooper's chairman, CEO and president.
"We have a steady flow of significant new business coming on stream now and continuing through 2003 and 2004. All our hard work and preparation over the past 18 months is allowing us to launch and deliver that business successfully and profitably."
Dattilo says while Cooper's North American tire unit sales declined 1% during the third quarter, industry-wide shipments were down nearly 8%. He points to steadily increasing manufacturing costs and decreased product demand as two of the tough conditions all participants in the tire industry are facing at this time.
Net sales for the Tire Group were $464 million, compared to $462 million in the third quarter of 2001. Third-quarter operating profit for the Tire Group was $27 million vs. a $9 million loss the year before, which included the recurring charges for the class action litigation settlement.
Excluding those charges, Cooper's comparative operating profit dropped 48%. In addition to rising raw material costs and less demand, Cooper says "much weaker customer and product mix and operating inefficiencies" contributed to the decline.
For the first nine months of 2002, Cooper generated $2.4 billion in net sales and $88 million in net income. Compared to the same period last year, net sales and income are up.
"We are clearly a stronger company today because of the expansion of our automotive business," says Dattilo. "We are more diversified and better able to sustain growth during seasonal or cyclical slowdowns in one business or the other.
"Moving forward, this will allow us to continue to generate strong cash flows and pay down our debt, generating value for our shareholders."
Cooper's stock was trading at $14.95 a share as of Oct. 15.
