FINDLAY, Ohio (Oct. 16, 2002) — Cooper Tire & Rubber Co. reported improved sales and earnings for the third quarter and nine months ended Sept. 30, with the gains coming principally from the company's automotive components business. The tire division suffered a 48-percent drop in comparable operating earnings as sales edged up 0.4 percent.
Thomas A. Dattilo, chairman, president and CEO, blamed the tire division's performance on slower sales in North America, rising raw material costs, weaker customer and product mix, and operating inefficiencies.
In particular, Mr. Dattilo said the tire division outperformed the industry in North America — Cooper saw a decline in passenger and light truck tire shipments of 1 percent vs. an 8-percent drop for the industry — but the company's product mix has skewed to lower margin products.
The tire unit reported net sales of $464 million in the quarter, up slightly from $462 million in the third quarter of 2001. Operating profit of $27 million contrasted with an operating loss of $9 million a year ago, Cooper said, but the 2001 result was affected by non-recurring charges for a class action litigation settlement. Excluding the one-time charge, the tire units' operating profit a year ago was $52 million.
For the nine months, the tire division posted a segment profit of $107.7 million, up significantly over the $33.5 million posted last year. Sales were up 2.2 percent to $1.32 billion.
Overall, net sales for the quarter rose 6 percent to $839.3 million from $791.5 million last year, while operating profit was $54.8 million contrasted with a loss of $8.6 million a year ago. Net income of $23.3 million compared with a loss of $19.5 million.
For the nine months, Cooper generated net sales of $2.49 billion — up 4.6 percent — and net income of $88 million, up measurably from the litigation-charge-affected $2.47 million last year.
"We are clearly a stronger company today because of the expansion of our automotive business," Mr. Dattilo said in a prepared statement. "We are more diversified and better able to sustain growth during seasonal or cyclical slowdowns in one business or the other."
The company's automotive components sector, he said, has a "steady flow of significant new business coming on stream now and continuing through 2003 and 2004. All our hard work and preparation over the past 18 months is allowing us to launch and deliver that business successfully and profitably."
However, Mr. Dattilo said the tire industry "is facing tougher conditions from both a manufacturing and a marketing perspective…."