FINDLAY, Ohio (Oct. 18, 2001)—Cooper Tire & Rubber Co. saw earnings fall 38.7 percent in the third quarter to $14.4 million, as sales fell 6.9 percent to $791.5 million on weaker demand by original equipment customers for the company's components. Two-thirds of the earnings decline is attributed to expenses for product liability and litigation.
Tire division sales and operating earnings fell 4.2 and 11.9 percent, respectively. For the nine-month period ended Sept. 30, Cooper's sales and net earnings fell 7 and 62 percent, respectively.
While tire sales overall were down, Cooper reported unit sales its light truck tires in North America increased by more than 4 percent, aided in part by the demand to fill Ford Motor Co.'s recall and replacement of 13 million Firestone P-metric light truck tires.
Sales of radial medium truck tire units were up by nearly 13 percent, Cooper said, significantly outpacing the industry.
In general, falling sales, lower production volumes related to inventory reductions and continuing product liability and litigation costs more than offset price increases, improved product mix and savings on raw material costs, Cooper said.
Cooper said restructuring efforts it initiated earlier this year saved the company $4 million in the quarter, with annualized cost savings of $25 million to $30 million expected. In addition, lean operation initiatives—such as reduced sales, advertising and capital spending costs—resulted in $18 million in lower overhead during the quarter.