Cooper Tire & Rubber Co. reported net income of $44 million on net sales of $804 million for its second quarter ended June 30, 2010. That compares to a net loss of $13 million on sales of $632 million for the same period in 2009.
The 27% increase in overall sales was paced by a 35% sales increase in Cooper's North American Tire Operations. North American sales totaled $575 million during the second quarter.
Operating profit for the second quarter totaled $34 million, a $7 million decrease compared with operating profit of $41 million in 2Q 2009.
Cooper cited improved volumes and increased utilization of manufacturing capacity for the favorable earnings. Conversely, "the relationship of net price and mix to raw materials, and the non-recurrence of a benefit recorded during the prior year second quarter for the curtailment of pension-related costs were unfavorable."
Through the first six months of 2010, Cooper posted net income of $56 million on net sales of $1.6 billion. That compares to a net loss of $34 million on sales of $1.2 billion for the same period last year.
(On July 27, 2010, Cooper filed an 8-K regarding the necessity to file amended financial statements to correct the accounting treatment of noncontrolling shareholder interest. These changes did not impact operating profit, cash flows or cumulative earnings per share for the company. More information on this matter can be found in the filing with the SEC.)
“While we were pleased with the improved volumes and capacity utilization during the second quarter of 2010, we are still committed to making improvements to the operations," says CEO Roy Armes. "We believe the second quarter included the greatest pressure during the year on margins from the relationship between prices and elevated raw material costs.
"Our price increase of up to 7.5% was effective June 1, 2010, and will take full effect in the third quarter. We expect that raw material costs will continue to be elevated, but stable, during the remainder of the year.
"We are pleased with the direction and benefits of the actions we have taken to position ourselves for growth," he says. "The recovery in demand for the global tire industry began in the second half of 2009 and will present more challenging comparables for growth during the second half of 2010.
"Demand for our products should continue to be strong. Our focus remains on profitable top line growth, improving our global cost structure and developing organizational capabilities while prudently managing our resources. We are confident about our abilities and have a proven history of successful execution. These factors and industry conditions leave us cautiously optimistic toward future results."
