FINDLAY, Ohio (Nov. 8, 2005) — Lower unit sales volume, high raw material costs and higher interest expense offset gains from price hikes in the third quarter, leading Cooper Tire & Rubber Co. to post a quarterly loss of $840,000.
Sales in the quarter ended Sept. 30 rose only 1.2 percent to $557.8 million. The net loss compares with a profit of $9.87 million for the year-ago period.
In the company's North American Tire unit, sales rose 2 percent to $509.4 million. Cooper said the increase was driven by improved price and mix but was offset partially by lower unit volumes. The Findlay-based tire maker's shipments of light vehicle tires were down 7 percent, with the largest declines in the economy and broadline passenger tire segments. Cooper's shipments of light truck tires increased by 9 percent.
Operating income in the segment fell 36.8 percent to $16.9 million. The decline was attributed to the lower unit sales—including a loss of broadline market share—and high raw material costs, Cooper said.
“Our sales were softer than we anticipated throughout the quarter and lagged the markets in July and August,” said Thomas Dattilo, Cooper chairman, CEO and president. “We saw improvement and gained market share in September, but it was not enough to overcome the slow start in the quarter. We made good progress in restoring production levels in our plants. Production on an equivalent unit basis was up for the quarter overall and more so in September. Our order fill rates and the availability of critical, high-demand products continued to improve, and these will be key factors as we work hard to regain business, particularly with our independent dealers going forward.”
For the nine months ended Sept. 30, Cooper posted sales of $1.58 billion, up from $1.54 billion a year ago. The tire maker posted a net loss for the period of $2.51 million, down from a profit of $68.1 million last year.
For the rest of 2005, Mr. Dattilo said he is “cautiously optimistic” about the company's chances to increase sales in North America in the fourth quarter. He cited continually rising raw material costs, high gas prices, declining consumer confidence and the lingering impact from this season's hurricanes as challenges in the market.