FINDLAY, Ohio — Cooper Tire & Rubber Co. reported double-digit improvements in operating and net income for the quarter ended Sept. 30 on 2.3-percent lower sales.
Cooper attributed the higher operating income — up 29.6 percent to $110.4 millon — to lower product liability costs, a non-cash pension settlement charge and other reduced costs, which offset unfavorable raw material costs, lower unit volume and higher manufacturing costs. As a result, the operating margin was up three points to 13.8 percent.
Net income was up 26.5 percent to $62 million, or $1.18 per share. Sales fell to $733.8 million.
In contrast, third-quarter results for 2017 included a $39 million benefit in operating profit from lower product liability costs, related to a reduction in the company's product liability reserves, it said.
Consolidated unit volume fell 2 percent, Cooper said, based largely on a 7.5-percent drop in volume in the Americas. By contrast, unit volume grew 31.3 percent in the international segment, with Asia leading the way, the company said.
"Our third-quarter performance, particularly the decline in North America unit volume, reflects continued challenges within the tire industry, including raw material cost variability, weak trends in retail sell-out of tires to consumers, elevated inventory in the channels and a fluid promotional landscape," said Cooper President & CEO Brad Hughes.
"In North America, we continue to respond to current market conditions by being competitive on pricing and promotions," he said. "We are addressing the unit volume decline, which was partially the result of the ongoing reduction in our private brand business, by expanding into additional channels with new positions in the car dealer and e-commerce channels, as well as new OE fitments that we will announce in the future. In addition, we have an aggressive schedule of new product introductions under way that continues throughout 2018 and 2019.
The hurricanes in Texas and Florida exacerbated these problems, Mr. Hughes said.
The Findlay-based tire maker approved a dividend of 10.5 cents a share, its 183rd consecutive quarterly dividend.