Cooper Q2 Results

Cooper Tire & Rubber Company has reported results for the second quarter of the year. Net income was $13 million, compared with the all-time record earnings of $39 m for Q2 last year. Turnover was up slightly at $840 m ($836 m) and operating profit was $38 m.

For the first six months, Cooper’s sales totalled $1.6 billion (the same as for the first half of 2002) and net income was $28 million (H1 2002: $65 m). The quarterly figures for Cooper’s various divisions are as follows:Automotive Group Operations turnover was down 4 per cent, to $413 m ($429 m).

Reduced light vehicle production in North America was cited as the cause, although some of the effect was offset by favourable exchange rates. Automotive Group operating profit was $26 m ($44 m).Tire Group Operations turned over $432 m in the quarter, up 4 per cent on the Q2 2002 figure of $414 m.

Operating profit was down, however, to $14 m, from $37 m. Significantly higher raw material costs were blamed, offset slightly by an improved product mix. Sales of Cooper’s high performance tyres grew strongly, showing a rise of 85 per cent in unit terms, while SUV tyre sales rose 24 per cent.

Overall, unit sales of Cooper tyres increased by 8 per cent.A continuing programme of cost-cutting throughout the group resulted in Q2 savings of $24 million. Thomas A Dattilo, Cooper’s chairman, president and CEO, described the quarter as “tough”, saying that tyre demand was soft and raw material costs were high, having an impact on profits by more than $20 million.

He was bullish about the future, however, saying that conditions are improving, with an upsurge in the North American replacement tyre market. In June, Cooper’s shipments of light vehicle tyres rose 4 per cent and overall tyre shipments were up by 16 per cent. Other plus points were an expected continuing improvement in product mix and a redusction in raw material prices.