International Operations Outshine Domestic For Cooper Tire
Cooper Tire & Rubber Co has reported a first quarter net income of $2 million on 31 March 2008. Net sales for the period were $679 million, an increase of $10 million over the prior year. According to the company, the increased revenues were driven by volumes in the International segment. Industry observers calculated that the $2 million figure represents a 92 per cent fall in first-quarter net income, with the Retuers news agency highlighting the fact that the company’s “headwinds” are exacerbated by a doubling of costs related to liability claims. For its part, Cooper conceded that the company has faced similar challenges to other North America-based businesses including “increased raw material costs, increased products liability costs, and decreased sales volumes in North America.
Cooper shares fell 96 cents (7 per cent) to $12.75, below the stock’s earlier 52-week low of $12.85, in response to the results.
Cooper’s North American Tire generated sales of $498 million, down 3 per cent from 2007’s record first quarter, and $8 million in operating profit which was considerably below the first quarter of 2007 ($28 million, an increase of $34 million over the first quarter of 2006). The segment’s decrease in sales, compared to the first quarter of 2007, was reportedly the result of lower unit volumes partially offset by improved mix. The largest volume decreases were in the areas of economy passenger and light truck tyres.