In the U.S., Cooper exceeds industry output
Financially, Cooper Tire & Rubber Co. fared well in the third quarter of 2014. Compared to 3Q 2013, the company improved its net loss to a net gain.
But how did the company fare in the United States?
Cooper's total light vehicle tire shipments in the U.S. increased 11% during the quarter, according to the company. The Rubber Manufacturers Association (RMA) member shipments were up approximately 0.3%; total industry shipments -- which includes an estimate for non-RMA members -- increased 3%.
Third-quarter net sales for the Americas Tire Operations segment as a whole rose 10%, from $633 million in 3Q 2013 to $694 million. Unit shipments increased 11%; last year’s third quarter included $29 million of lower unit volume associated with the Cooper Chengshan (Shandong) Tire Co. Ltd. (CCT) labor issues.
The quarter's unit volume increase was driven primarily by sales of
* new, higher margin passenger and light truck products introduced in the last year, and
* truck and bus radial tires.
The segment's operating profit for the third quarter was $76 million, or 10.9% of net sales. That compares to $39 million, or 6.1% of net sales, for the same period last year. The higher operating profit primarily reflected favorable raw material costs of $55 million, higher unit volume of $14 million and favorable products liability costs of $5 million.
These benefits more than offset unfavorable price and mix of $27 million, as well as higher selling, general and administrative costs of $6 million, partially reflective of increased investment in brand awareness. (The 2013 quarter included $6 million from lower volume related to the CCT labor issues.)
For the nine-month period, net income increased 43.6%, from $91.4 million to $131.3 million, and net sales increased 2%, from more than $1.8 billion to $1.9 billion. Operating profit increased 27.4%, from $169 million to $209 million.
Cooper posted net income of $47.7 million on net sales of $920.1 million for the third quarter ended Sept. 30, 2014. For more on the company-wide financial results, and to read what Chairman, CEO and President Roy Armes had to say about them, click here.