Cooper Tire Increases Its Profitability in Fiscal 2015
Cooper Tire & Rubber Co. posted net income of $59 million on net sales of $776 million for the fourth quarter ended Dec. 31, 2015. That compares to income of $86 million on sales of $820 million for the same period in fiscal 2014.
Operating profit increased 90.7%, from $54 million to $103 million
For fiscal 2015, the company recorded net income of $213 million on net sales of nearly $3 billion. That compares to income of $214 million on sales of $3.4 billion the prior year.
The company's full-year income-to-sales ratio was 7.1% versus 6.2% in 2014. Operating income was up 18%, from $300 million to $354 million. Unit volume was up 6.8% year-over-year, with increases in all regions.
“It was an exciting year for Cooper as we took numerous steps around the globe to continue to transform and enhance our business,” says Chairman, CEO and President Roy Armes. “Our fourth-quarter and full-year performance was very strong, with unit volume increases in all regions and excellent operating profit. In fact, our full-year operating margin of nearly 12% exceeded the 8 to 10% that we established as a mid-term goal for Cooper.
"We continued to execute our strategic plan and invest in operations around the globe to improve our competitive position. Specifically, we invested in modernizing and enhancing our facilities and continued to invest in technology and product innovation. We are seeing a return on these investments as Cooper moves upstream, selling more high value, high margin products. In addition, we continued to return cash to shareholders through share repurchases and our ongoing dividend.
“In 2015, we broadened our global reach and capabilities through expansion in Latin America and strategic partnerships such as our recently announced agreement to acquire a majority interest in China-based Qingdao Ge Rui Da Rubber Co. Ltd. (GRT)," he adds.
For 2016, the company anticipates the following:
* unit volume growth in each of its segments, and unit volume growth in its U.S. operations at or above the industry;
* further declines in raw material costs in the first quarter of 2016;
* total company operating margin, excluding the impact of acquisitions, to be above the high end of the company’s mid-term target of 8% to 10%, but not likely to exceed the 2015 results;
* the International segment, excluding the impact of acquisitions, to substantially improve operating profit in 2016 and approach break-even operating profit by the fourth quarter;
* capital expenditures for 2016 to be in a range of $240 million to $260 million, excluding the impact of any acquisitions;
* the full-year 2016 effective tax rate to be in a range of 34% to 36%.
In the Americas Tire Operations, Cooper posted a 3.2% increase in net sales for the quarter and a 3.8% increase in sales for 2015.Operating profit was up 85% and 54%, respectively.
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