FINDLAY, Ohio (March 1, 2007) — Cooper Tire & Rubber Co. posted double digit sales gains in both the fourth quarter and full-year 2006, but its net loss deepened in the periods as management said it will continue cost-cutting and profit improvement plans.
The Findlay-based tire maker's fourth quarter sales rose 29.1 percent to a record $739.1 million from $572.4 million the prior period. Sales for the year rose 24.2 percent to $2.68 billion.
Cooper said the gains came primarily from the addition of Cooper Chengshan (Shandong) Tire Co. Ltd. operations in China, which the tire maker bought in February 2006. Improved sales volume, pricing and mix in North America and Europe also contributed to the sales increases, the firm said.
Sales in Cooper's North American Tire operations also rose 11.6 percent to $585.2 million in the quarter. Sales for the year gained 7.2 percent to $2.1 billion.
Cooper said this segment continued to gain share in the fourth quarter as total light vehicle tire shipments were up 1 percent vs. the prior period.
Despite the sales gains, Cooper reported deepening net losses in both the fourth quarter and the year. The quarterly loss slipped to $27.6 million from $6.85 million the prior period. For the year, the loss fell to $78.5 million from $9.36 million in 2005.
Segment quarterly profit in North American Tire jumped to $35.1 million from $8.78 million the prior period. But the segment fell for 2006, dipping to a net loss of $4.02 million from earnings of $32.8 million in 2005.
“We are pleased with the improvement in our North American Tire operations,” said President and CEO Roy Armes, who joined Cooper in January from Whirlpool Corp., where he served as senior vice president, project management office.
“Productivity increased and total variable costs declined as a result of a solid team effort to deliver on our profit improvement goals,” he continued. “Sales were relatively strong as total unit volume increased and we gained market share in virtually every product category. Strong sales and continued management focus helped drive inventory lower (by 1.2 million tires in the quarter), as we had planned, adding to our solid cash generation in the quarter.”
Mr. Armes added that Cooper would continue the cost cutting and profit improvement plans the firm had highlighted last fall under interim CEO Byron Pond. The firm said many of these projects are expected to be completed this year.
Production also has recently started at Cooper's joint venture plant with Kenda Rubber Industrial Co. Ltd. in China. Cooper previously has said the plant should provide Cooper about 1 million tires this year and about 6 million to 7 million tires at full capacity.