FINDLAY, Ohio, (Nov. 1, 2010) — Cooper Tire & Rubber Co. reported third quarter net income attributable to Cooper Tire of $44.6 million, a 4.9-percent decline from 2009.
Net sales for the quarter increased 9.9 percent to $882.9 million from the prior year. Operating profit fell 5.1 percent to $67 million. Results during the quarter included restructuring charges of $5 million related to the closing of the Albany, Ga., factory, a decrease of $9 million from the third quarter of 2009, Cooper said.
The tire maker concluded the restructuring project during the third quarter of 2010.
The income decrease was the result of higher raw material prices that were in part addressed by price increases and mix, according to Cooper. Improved manufacturing, increased use of capacity and lower restructuring costs also contributed favorably to results.
For the first nine months ended Sept. 30, Cooper generated $2.44 billion in net sales, compared with $2.0 billion last year.
Net income attributable to Cooper Tire surged $100.3 million for the same period, compared with $12.6 million in 2009. The change in net income included $62 million of improvement from discontinued operations.
The company has posted a summary presentation of information related to the quarter on its website.
The Findlay-based company's North American Tire Operations achieved 12.9-percent higher net sales of $647.8 million during the third quarter. Meanwhile, operating profit was $54.9 million, a 15.3 percent jump from last year's period.
Cooper said the increased sales were the result of stronger price and mix partially offset by decreased volumes. Total light vehicle tire shipments for Cooper´s North America segment in the U.S declined 1.8 percent.
Comparable shipments in the prior year's third quarter were extremely strong, the company said, as the segment had higher levels of available inventory to meet the rebound in customer demand.
Cooper said the segment entered the third quarter of 2010 with historically low levels of inventory.
“We were pleased with the strong margins achieved by the company during the third quarter of 2010 and the continued strong demand for our products,” said Cooper Chairman and CEO Roy Armes. “We entered the third quarter with lower inventory in contrast with a year ago when high levels of inventory were available to support demand. We are taking action to increase our production levels and intend to produce 10 percent more units in 2011 than in 2010.”
Mr. Armes added that Cooper expects higher raw material costs and has instituted price increases globally.
Favorable pricing and mix of $75 million was more than offset by $96 million of higher raw material costs. Improved manufacturing operations increased results by $11 million as the segment leveraged consolidated operations.
For the nine months, North American Tire improved operating profit 22.8 percent to $88.3 million compared with 2009.