Cooper Posts Improvements in Q1

Tire Review reports Cooper Tire & Rubber Co. reported net income of $12 million for the quarter ended 31 March, a $33 million improvement from the same period in 2009. Net sales were $754 million, an increase of $183 million, or 32 per cent, from the prior year. Operating profit was $33 million for the quarter, a $49 million improvement compared with a loss of $16 million in 2009, the company said.

Results during the quarter included restructuring charges of $8 million, related to the closure of the Albany, Georgia, facility, a decrease of $7 million from the first quarter of 2009. The results were driven by improved volumes and increased utilization of manufacturing capacity. Partially offsetting the positives were a negative net price and mix to raw materials relationship and higher products liability charges, Cooper said.

North American tyre operations sales were $532 million during the first quarter, up from 2009 net sales of $439 million. Total light vehicle tyre shipments for Cooper’s North America segment in the U.S. increased by 19 per cent. The company’s international tyre operations reported $294 million in sales, an increase of $127 million, or 77 per cent, compared with the prior year same quarter. Asian operations increased sales volumes by 102 per cent, while European operations reported an increase in unit sales of 20 per cent.

“We were extremely pleased with the improved volumes and manufacturing performance achieved during the first quarter of 2010,” said Roy Armes, CEO. “The increases in volume were the result of better industry conditions combined with successfully positioning the company for growth. The momentum also continued in our operations where our efforts to be more cost competitive were again visible on the bottom line.

“While our outlook remains cautiously optimistic, we recognize that raw material costs continue to be volatile and have a significant impact on our results. We expect that raw materials will continue to increase and remain elevated in the near future,” he continued.

At the company’s shareholder meeting yesterday, shareholders passed two measures to strengthen shareholder control and to increase the number of shares available to award as incentive compensation to company officials.

Shareholders overwhelmingly approved a measure that “declassified” the company’s directors at the end of their current three-year terms, allowing for yearly election of the company’s entire board.

In response to a question from one of the handful of outside shareholders in attendance, CEO Roy Armes said the proposal was made “at the request of shareholders.”

The firm’s request to broaden the number of shares at its disposal for incentive compensation to executives and company officers was approved by shareholders by more than a 2:1 ratio.