After reporting its best earnings performance since mid-2000, Cooper Tire & Rubber Co. said it expects profits in the second quarter to be nearly twice the level of a year ago and 30 percent higher than the financial community's consensus estimate.
``We had a solid quarter,'' said Thomas A. Dattilo, chairman, president and CEO, referring to first-quarter earnings of 36 cents a share, ``and we intend to keep the momentum going.''
``Looking ahead, we expect the demand for tires to remain relatively strong through the spring and into the summer,'' Mr. Dattilo said. ``That should help keep pricing steady and inventories declining.'' Cooper raised prices 4 percent on passenger and light truck tires March 1.
In addition, Cooper locked in decent prices for a significant portion of its material requirements for the next several months, leaving the firm in good shape in terms of raw material costs, Mr. Dattilo said.
For the first quarter, Cooper posted net income of $26 million on sales that rose 7 percent to $813 million. Operating profit increased 143 percent to $61 million, as Cooper's restructuring began to pay off.
Tire unit sales in North America rose 15 percent vs. the industry's 5-percent increase, while dollar sales in the tire segment improved 12 percent to $433.4 million. The most significant increases were in the Cooper and Mastercraft brands, Mr. Dattilo said. Passenger tire shipments were up 17 percent and light truck tire shipments grew 8 percent, vs. the industry average of 5 percent in both cases.
``We continue to realize the benefits of our hard work and the implementation of our strategies,'' Mr. Dattilo said in a prepared statement. ``While greater strength in the economy certainly played an important part in our results, we were able to outperform our industries because of several factors, including new business in both tires and automotive components and the savings from our restructuring initiatives. These are things we will be able to build on and benefit from throughout the year.''
Mr. Dattilo said he expects Cooper's earnings to be 45 to 50 cents a share in the second quarter, compared with 25 cents a share in the 2000 second quarter and compared with the 30 cents a share consensus estimate.