Cooper expects 'modest earnings' for first quarter
Due to the challenging economic environment, Cooper Tire & Rubber Co. expects to report "modest earnings" for the first quarter of 2008. "Our current estimate is considerably below expectations," say Cooper officials.
The revised estimate comes on the heels of "continued increases in raw material costs globally, increased charges for product liability claims related primarily to revised estimates on existing claims, and the decline in the volume of unit shipments in North America, particularly in March.
"Recet changes in macroeconomic conditions in North America have created a new set of challenges for our company." Changes include:
* fewer miles driven by consumers.
* delayed tire purchases.
* the impact of the dollar's declining value.
* record-level raw material prices, "specifically in natural rubber and oil-derived materials."
Despite these developments, Cooper CEO Roy Armes says the Findlay, Ohio-based tiremaker is "well-positioned and fully committed to our long-term strategy to build a sustainable and cost-competitive supply of tires.
"We are fortunate to be in a position to deal with this current economic environment with a strong balance sheet, high liquidity levels and the anticipated sale of our investment in Kumho Tire Co."
In March, a spokesman for Kumho confirmed that Kumho Tire Co. Inc., parent company of Kumho Tire U.S.A. Inc., is looking for investors to buy the 10.7% stake that Cooper holds in Kumho. Cooper has been a minority shareholder in Kumho since 2005.
Cooper plans to make its first quarter results available on May 7.