Cooper Net Income Rises In Fourth Quarter

Cooper Tire & Rubber has reported a 50 per cent rise in net income in the 4th quarter of 2002, compared to the same period in the previous year. Net income was $23 million on a turnover of $842 million (4Q 2001: $16 m/$777 m).For the year as a whole, the group’s net income was $112 million.

Net income for 2001 was $18 m, but this figure was affected by a charge of $72 million in class action settlement charges. Without these, 2001 net income would have been $63 million. Cooper reduced debt by $203 million over the year and paid a dividend for the 124th consecutive quarter.

Sales for the Tire Group in 4Q rose nearly 9 per cent to $458 million ($421 m), attributable largely to a 10 per cent increase in unit volumes, but operating profit declined to $30 million ($40 m). Reasons cited for this included rising raw material costs and operating inefficiencies related to inventory reduction efforts.For the full year, Tire Group sales were up 4 per cent to $1.

8 billion ($1.7 bn), with unit sales rising by nearly 5 per cent. Operating profit for the year was $137 million, compared to $73 million in 2001.

However, factoring out the settlement charges reveals that operating profit declined by $8 million, or 5 per cent.The Automotive Group posted net sales for the year of $1.6 billion, a rise of 7 per cent on the $1,5 bn in 2001.

Speaking about the figures, Cooper chairman, president and CEO Thomas A. Dattilo said: “We achieved some very solid numbers for the quarter and the year, but our results go beyond the numbers. We set certain goals at the beginning of the year and we achieved them.

We met our targets for unit growth in tyre sales. We reduced tyre inventory just as we said we would. We met or exceeded our targets for restructuring and lean savings.

And, importantly, we were able to generate a significant amount of cash and we met our debt reduction targets. Each of these is a solid accomplishment, combined, they are outstanding.”Looking head, Dattilo counselled caution, saying: “Challenging operating conditions in our industries will likely persist in the first half of 2003.

Tyre demand appears to be soft, especially in comparison with the strong first quarter of 2002. Some pre-buying in advance of the January price increases probably pulled some tyre sales forward and raw material prices will also be higher in the first half of the year.”However, Dattilo was more optimistic about the second half of the year, looking forward to improving economic conditions and raw material costs being offset by recently-implemented tyre price increases and he concluded: “We are confident that over the course of the year, improving economic conditions and improvements in our own performance will allow us to achieve results even better than in 2002.