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Analysts Upgrade Cooper Shares

Some financial analysts report they have become increasingly optimistic regarding Cooper Tire’s intermediate term performance. The Deutsche Bank report suggested the that poor US demand would soon get better with Cooper benefiting. The analysts also commented that Goodyear’s strategy is likely to have a positive effect on Cooper in the tight supply market. They were also “increasingly convinced” about Cooper’s ability to significantly reduce costs and improve profitability.

5th December 2006/by Tyrepress Editors

Goodyear Strike to Affect Rubber Prices

Goodyear’s position as a leading global buyer of natural rubber means its ongoing strike dispute with the United Steelworkers is likely to affect natural rubber prices, according to analysts at Deutsche Bank. “Since Goodyear buys approximately 10 per cent of the world production of natural rubber, the strike at the company’s North American plants has consequences on raw material prices,” the analysts wrote, adding: “They are currently producing at 40 per cent of their pre-strike capacity (10 per cent at union plants and 100 per cent at non union plants).”

24th November 2006/by Tyrepress Editors

Report: Korean Manufacturers Struggle to up Global Brand Recognition

Korean tyre manufacturers have an uphill struggle on their hands if they want to improve their products’ brand recognition on a global scale, according to a recent Deutsche Bank report. Instead the analysts expect that any improvement should come through higher gross margins for their distribution subsidiaries. “In our view, the industry’s competitive landscape is not favourable for Korean tyre makers and it will be very difficult for them to improve their brand recognition in the highly competitive global tyre market,” the analysts commented.

24th November 2006/by Tyrepress Editors

European PCR Replacement Market up 9 per cent

Passenger car tyre replacement markets were “very strong in October,” according to Michelin. The research shows that the European replacement market sales grew 9 per cent (+2.9% year-to-date); and 4 per cent in North America (-3.2% year-to-date). Truck tyre sales also grew in the period, according to report, although not as much as the passenger car market.

23rd November 2006/by Tyrepress Editors

Natural Rubber Falls to 2005 Levels

Natural rubber prices have fallen to levels last reached 18 months ago ($1.55/kg). This represents a 45 per cent drop from the peak reached last June and 27 per cent on the average tyre companies were paying in 2006 (approximately $2.15/kg), according to a Deutsche Bank report. As the analysts’ predictions are based on 2007 natural rubber prices of $1.9/kg this could result in improved earnings for tyre companies that spend highly on natural rubber.

21st November 2006/by Tyrepress Editors

Union Ends Talks With Goodyear

The United Steelworkers has walked away from contract talks with Goodyear. The USW informed its members that its negotiating team has left Cincinnati – site of the Goodyear/USW master contract talks – and that no new negotiations had been scheduled. “We will go back when the company has something new to show us,” USW spokesman Wayne Ranick said in a Reuters report. Goodyear, for its part, said that its negotiating team would remain in Cincinnati and stood ready to continue bargaining for a new master contract.

So where do the two sides go from here? Deutsche Bank analysts reported that the USW sees Goodyear’s unilateral announcement of a plant closure as “setting an unacceptable precedent, and the bottom line is they aren’t going to budge on this issue.”

20th November 2006/by Tyrepress Editors

Hankook Profits Fall 16 per cent

Hankook Tire Co. has reported that its third-quarter profit fell 16 per cent on higher raw material costs and a stronger currency. Net income was 44.4 billion won ($47 million) in the quarter that ended 30 September compared with 52.9 billion won ($56 million) a year earlier, the company said in a regulatory filing. Sales rose 7.9 per cent to 526.4 billion won ($558 million). Operating profit fell 27 per cent to 40 billion won ($42 million).

15th November 2006/by Tyrepress Editors

Goodyear and Steelworkers Return to the Table

Goodyear and the United Steelworkers will return to the negotiating table in Cincinnati today, both sides confirmed over the weekend. It will mark the first formal talks between the two sides since USW workers hit the picket line on 5 October at 16 Goodyear plants in North America. Last week, Goodyear published information on its most current offer to the Steelworkers, and indicated that it was ready to get back to negotiating. While acknowledging the tyremaker’s move back to formal talks, the USW, however, did not immediately commit to returning to the bargaining table until Saturday.

14th November 2006/by Tyrepress Editors

Cooper Gives Further Restructuring Details

Cooper Tire has given more details about how it will achieve its previously announced $100 million inventory reduction by the end of 2007. Analysts report that a recent update from the management pointed to improvement on all fronts. According to Deutsche Bank, the company has already achieved $40 million of its inventory reduction goal, and has identified approximately $34 million of its $70 million annual cost reduction target. Cooper is aiming for $170 million of total improvement from cost reductions and other initiatives.

1st November 2006/by Tyrepress Editors

USW to End Contract Extension With Goodyear

The United Steelworkers (USW) has advised Goodyear that it was giving the company the required 72-hour notice to terminate the extension of the parties’ labour contract. The contract expired on 22 July 2006, and both parties agreed to an extension that could be terminated with 72 hours notice. Some industry observers have interpreted this to be a precursor to industrial action. A possible strike would affect Goodyear’s 12 North American plants (eight tyre factories and four engineered products plants).

3rd October 2006/by Tyrepress Editors

Natural Rubber Reaches New Low

After reaching record levels earlier in the year, natural rubber prices have now fallen to more comfortable levels for tyre manufacturers. On Friday 22 September the price of natural rubber dropped to $1.7, almost 40 per cent less than the peak reached three months ago.

25th September 2006/by Tyrepress Editors

Nokian “On the Road Again”

Following positive second quarter reports Nokian Tyres is back “on the road again,” according to Deutsche Bank analysts. “Going forward we are seeing an improved mix driven by new products (Hakkapeliitta 5), less Nordic competition due to fast growth in the German winter tyre market, continued strong growth in Russia and raw material prices contracting clearly from recent peak levels,” said the analysts. The Deutsche Bank market watchers said they are pojecting more than 20 per cent earnings per share growth in 2006 and 2007.

25th September 2006/by Tyrepress Editors

Natural Rubber Prices Continue to Fall

The price of natural rubber fell by five per cent earlier this week, to $1.80/kg. Analysts at the Deutsche Bank say that this brings the price close to the level in January this year ($1.75/kg) and is a 35 per cent drop from the peak price last June of $2.80/kg.

7th September 2006/by Tyrepress Editors

Nokian Shares Soar 18 per cent Following Positive Results

Analysts have interpreted Nokian’s positive results as an indication that the Finnish company’s move to Russia has paid off. Results published yesterday showed the company’s second quarter sales grew almost 60 per cent in the second quarter. “Net sales came in at 120.3 million euros, some 11 per cent better than expected; EBIT came in at 26.8 million euros some 45 per cent better than our estimate of 18.4 million,” Deutsche Bank analysts reported.

9th August 2006/by Tyrepress Editors

Kumho Reports 2Q Sales of £241 million

Kumho’s second quarter sales amounted to 429 billion won (£241.094 million), lower than the 469 billion won figure that was widely expected. At the same time operating profit of 14 billion won (£7.868 million) was said to be similarly disappointing compared with market estimates of 40 billion won. Operating profit fell by 70.5 per cent year-on-year and 45.2 per cent quarter-on-quarter.

31st July 2006/by Tyrepress Editors