Cooper reports first quarter 2005 results
Cooper Tire & Rubber Co. reported a 7% year-over-year increase in net sales, setting a new first quarter record of $514 million in the quarter ended March 31, 2005, compared with $480 million in the same period of 2004.
Net income for the quarter was $5 million including an additional $6 million gain on the sale of Cooper-Standard Automotive following final post-closing adjustments.
The quarter's results were also impacted by costs associated with the work stoppage at the company's Texarkana, Ark., tire manufacturing facility which began on March 12, 2005, and ended on April 11, 2005. These costs amounted to approximately $7 million pre-tax during the quarter.
Including the impact of the strike, the company's continuing operations generated a net loss of $1 million during the first quarter of 2005 compared to net income of $2 million in the first quarter of 2004.
During the quarter the company repurchased 6.4 million shares of common stock for $122 million.
The company's North American tire operations reported sales of $464 million in the quarter, up 8% compared to $428 million in the first quarter of 2004. This increase was driven by improved pricing and product mix and was partially offset by lower overall unit volumes.
Cooper's shipments of premium performance and light truck tires significantly outpaced the industry's during the first quarter, the company said, increasing by more than 32% and 8%, respectively.
In addition, shipments of Cooper brand products outpaced the industry with an increase of more than 5%. Overall unit shipments were down, however, as a result of lower shipments in the economy and broadline tire categories.
First quarter operating profit for the North American Tire operations was $7 million, compared to $13 million in the same period last year. The decline was largely the result of the impact of the strike in Texarkana, higher raw material costs, and lower unit volumes.
In total, the higher raw material costs reduced North American operating profit by $26 million compared to the prior year, Cooper said.
Cooper's international operations reported sales of $65 million in the quarter, even with 2004. It recorded an operating loss of $1 million compared with an operating profit of $3 million last year.
The decline was driven by higher raw material costs, admisinstrative costs associated with the start-up of Asian operations, timing of advertising expenses in Europe and slightly weaker product and customer mix.
In early April, the company's joint venture with Kenda Rubber Industrial Co. Ltd. was successful in obtaining the final governmental approvals and business license to build the tire plant in China as previoulsy announced and to commence business operations. Construction on the plant is scheduled to begin within the next few weeks.
Tom Dattilo, Cooper's chairman, president and CEO, said, "We are pleased with the growth in sales of our premium products which helped us to start the year with another quarterly sales record. Excluding the impact of the strike in Texarkana, our results were slightly better than we had previously forecast because of the improved pricing, mix and operations."