Cooper achieves fourth quarter sales, profit gains
Cooper Tire & Rubber Co. posted net sales of $739 million for the fourth quarter of 2006, a 29% increase over the same period in 2005 and a record for the company. Cooper's operating profit for the fourth quarter totaled $28 million, a $22 million jump from 4Q 2005.
"The year-over-year (sales) increase was driven primarily by the addition of the operations of Cooper Chengshan (Shandong) Passenger Tire Co. Ltd. and Cooper Chengshan (Shandong) Tire Co. Ltd. in China, of which the company acquired controlling interests, effective Feb. 4, 2006," say Cooper officials.
"Improved sales volume, pricing and mix in North America also contributed to the increase in total revenue."
Cooper officials credit the company's operating profit increase to improved product mix and pricing in North America and Europe, plus "improved operating efficiencies in the company's North American production facilities."
For the full year of 2006, Cooper posted sales of $2.7 billion, a 24% increase from 2005. However, the Findlay, Ohio-based tiremaker took an operating loss of $10 million and a net loss of $79 million versus an operating profit of $26 million and a net loss of $9 million the previous year.
During the fourth quarter, Cooper wrote off $52 million "in goodwill and tangible assets associated with previous acquisitions within the North American Tire segment."
Cooper's North American Tire operations posted sales of $585 million for 4Q 2006, up 12% from the same period in 2005, due to pricing and mix improvements, "as well as a small improvement in tire unit sales."
However, company officials report that the hike in tire sales was partially off-set by lower sales within Cooper's Oliver Rubber Division.
Cooper's operating profit in North America totaled $35 million during 4Q 2006 versus $9 million in 4Q 2005.
"The North American Tire segment was successful in reducing inventory by 1.2 million tires during the quarter, generating $57 million in cash."
For the full year of 2006, Cooper's North American Tire unit achieved sales of $2 billion and an operating loss of $4 million compared to sales of $1.9 billion and an operating profit of $33 million for the full year of 2005.