Cooper Tire & Rubber Co. posted net income of $82.2 million on net sales of $819.6 million for the fourth quarter ended Dec. 31, 2014. That compares to income of $19.6 million on sales of $861 million for the same period in fiscal 2013.
The company's income-to-sales ratio was 10%. Its operating income was up 14%, from $46.9 million to nearly $53.6 million.
For the full year, Cooper recorded net income of $213.5 million on net sales of $3.4 billion. That compares to income of $111 million on sales of $3.4 billion for 2013.
Both the 4Q and full-year results include a gain of $56 million net of tax from the sale of the company's 65% in Chengshan (Shandong) Tire Co. Ltd. (CCT) in China.
"I am proud of what we accomplished in 2014, particularly after a very disruptive year in 2013," said Roy Armes, chairman, CEO and president.
"Our full year 2014 operating profit was our second best in our 100-year history. Unit volume for the full year rose 6%, and our operating margin was strong at almost 9%.
"In the fourth quarter, we continued to see robust unit volume growth in the Americas segment, and that segment delivered operating margins near 10%. However, our fourth-quarter results were negatively impacted by weakness in our international operations.
"In 2015, we will continue our focus on exploring opportunities to expand our presence in Asia after the sale of our interest in the joint venture, so as to benefit from a more sizeable footprint in that high-growth market," said Armes.
Americas Tire Operations
Fourth-quarter net sales rose 10% to $689 million from $628 million in 2013. Unit shipments increased 8% compared with the same period in 2013.
Fourth-quarter 2014 sales included the recovery of $26 million of unit volume associated with the labor issues at CCT in 2013. The 4Q unit volume increase was driven primarily by sales of new, higher margin light truck products, as well as higher sales of truck and bus radial tires.
Cooper's total light vehicle tire shipments in the United States increased 4% during the quarter compared with the fourth quarter of 2013. The Rubber Manufacturers Association (RMA) member shipments were up approximately 3%, and total industry shipments (including an estimate for non-RMA members) increased 2%.
For the full year, net sales increased 4% to $2.59 billion. Operating profit was $275 million versus $204 million in 2013. Operating margin was 10.6% vs. 8.2% last year.
Outlook from Armes
"In 2015, we expect the tire markets to continue to grow modestly in North America. In the Americas segment, while the early part of this year is likely to be negatively impacted by the pre-buying we saw ahead of the tariff announcements, we expect to continue our strong performance for the full year.
"In Asia, the tire market is growing at high single-digit rates. We are looking to invest in Asia to expand our business after the sale of CCT. Until that time, we will see the impact of a higher cost structure on our operating profit.
"In Western Europe, markets have softened, and we expect continued volatility in Russia and Eastern Europe.
"Raw material costs continue to be favorable, and we are expecting further declines in the first quarter," said Armes. "We are monitoring these costs, along with the tariff implementation and its impact. Our goal is to maintain our margins, while recognizing the need to remain competitive.
"Overall, while we expect that global tire markets will remain highly competitive in 2015, we expect to exceed industry unit volume growth rates in our largest markets for the full year. House brands will be a key contributor to this growth.
"For the full year, we expect to continue our strong performance in line with our strategic plan."
