FINDLAY, Ohio (April 22, 2004) — New products and new business pushed Cooper Tire & Rubber Co. to a 22.6-percent jump in sales and a 56-percent hike in net income for the first quarter, but increasing costs continued to bite at the company's heels.
Findlay-based Cooper reported record sales of $974.5 million and net income of $23.8 million for the period ended March 31.
Sales in the company's Tire Group also set a record at $485.1 million, up 22.5 percent from $395.9 million last year. The increase was driven by a 12-percent jump in tire unit volumes and improving customer and product mix, Cooper said. Net sales of high performance and ultra-high performance tires rose 47 percent in the quarter, and sales of P-metric sport-utility vehicle tires increased by 52 percent with light truck tires rising 27 percent, compared to the year-ago quarter.
“Our Tire Group set a first quarter record in sales but continued to face headwinds from raw materials costs, just as we had said and expected, and that impacted operating margins,” said Tom Dattilo, chairman, president and CEO of Cooper.
Tire segment operating profit fell 3.6 percent to $15.7 million from $16.3 million last year. Increasing raw material costs reduced operating profit by $18 million. Product liability insurance and litigation costs were $9 million higher than 2003's first quarter. Cooper said these items essentially offset the positive impact of the higher sales.
Cost reductions in the group exceeded $10 million in the quarter and are on track to reach $49 million for the year, Cooper said.
Automotive segment operating profit surged 69.2 percent to $39.1 million from $23.1 million last year. Net sales in the segment also grew 23 percent to $497.0 million from $404.2 million in 2003's first quarter. Cooper said it still is exploring the possibility of selling the automotive segment, and it has found “significant interest.” Cooper said for the time being it remains focused on running the business, meeting targets for increasing sales and implementing cost-reduction initiatives.
“2004 is shaping up to be a very exciting year for Cooper,” Mr. Dattilo said. “Our sales volumes are going to be strong, we are seeing significant improvement in our plants, and we are finding ways to reduce costs to offset the headwinds of raw materials and product liability expense.”