Cooper Tire & Rubber Co.'s North American tire operations reported sales of $525 million in the fourth quarter ended Dec. 31, 2005, up 7% compared to $491 million in the fourth quarter of 2004. This increase was driven by improved pricing and product mix.
The company says its shipments of premium SUV and light truck tires continued to outpace the industry during the fourth quarter, increasing by more than 8%. In addition, Cooper's shipments of high and ultra-high performance tires increased by more than 37%.
Overall tire unit shipments were flat, however, as a result of lower shipments in the broadline economy tire category.
Fourth-quarter operating profit for the North American Tire operations was $9 million, compared to $14 million in the same period last year. The decline was largely the result of the following:
* higher raw material costs;
* the inefficiency and unabsorbed overhead resulting from reduced operating levels in North American plants; and
* the scrap related to voluntary product recalls.
These costs were partially offset by improved price and mix and a positive settlement in a dispute with certain material suppliers.
For the full year, the company's North American Tire operations reported sales of $2 billion, up 4% compared to $1.9 billion in 2004. The increase was primarily the result of higher prices and improved product mix, partially offset by lower tire unit shipments and reduced shipments of tread rubber and custom mix rubber products.
Full-year operating profit in North America was $36 million, compared to $76 million in 2004. The decline was primarily the result of higher raw material costs, lower total unit shipments, and operating inefficiencies related to both the strike in Cooper's Texarkana, Ark., production facility in the first and second quarters and the reduced operating levels in all four North American production facilities in the fourth quarter.
These were partially offset by overall improvements in price and product mix.
Cooper's stock price on the New York Stock Exchange closed at $14.90 a share on Tuesday, Feb. 28. That compares to a 52-week high and low of $21 and $13, respectively.
