FINDLAY, Ohio (April 24, 2001)— Cooper Tire & Rubber Co. suffered double-digit drops in income and sales in the first quarter, as markets for both tires and automotive parts weakened significantly.
However, Thomas Dattilo, Cooper chairman, president and CEO, called the first quarter result an “anomaly” and said the company expects to take advantage of “a much improved selling environment throughout the rest of the year.”
First-quarter operating profit of $25 million was a drop of 65.4 percent from the first quarter of 2000. Sales overall fell 18 percent from a record performance a year ago to $758 million. Net income fell 88.4 percent to $3.6 million.
Tire and related products sales were off 13 percent to $388 million, as unit sales fell 18 percent primarily due to the soft North American replacement tire market.
Cooper also blamed the fall in profits on higher raw material and energy costs, as well as charges of about $19 million for litigation and product liability provisions.
Regarding the first quarter results, Mr. Dattilo said, “This has been a very difficult quarter, especially in contrast to the record-breaking first quarter of last year. We are by no means pleased by our first quarter results, but we continue to execute our plans and strategy which have been and will continue to be successful for us.”
“In spite of the anomaly that was the first quarter, there are many reasons to be optimistic as we look to the months ahead,” Mr. Dattilo said.
“Tire price increases implemented in North America appear to be holding. During the quarter Cooper-Standard Automotive won over $80 million in net new business awards that will come on stream in the next few years. Light vehicle inventory has come down dramatically and should lead to more stable production patterns during the rest of the year.”
Cooper officials, in a subsequent telephone-based conference for securities analysts following release of this data, said first-quarter sales were down down more than usual because dealers had stocked up on tires in the fourth quarter of 2000 in anticipation of a price increase initiated by the company in January.