FINDLAY, Ohio — Cooper Tire & Rubber Co. posted double-digit drops in operating income for the three- and nine-month periods ended Sept. 30 due, in part, to the negative effects of higher costs related to U.S. import duties on Chinese products and higher manufacturing costs.
Sales revenue for both periods also fell, by 4.5% in the quarter to $704.1 million and by 1.7% in the nine months to $2 billion. Unit sales dropped 7% in the quarter.
Operating income in the quarter dropped 35% to $52.8 million and by 21% in the nine months to $110.9 million, cutting the operating margin three-and-a-half points in the quarter to 7.5% and one-and-a-half in the Q1-Q3 period to 5.5%.
Cooper said its third-quarter operating profit was affected negatively by $15 million in higher costs related to the U.S. import duties on tires from China, by $16 million of lower volume impact and by $12 million of higher manufacturing costs (related to the lower volumes).
On the plus side, Cooper booked $20 million in favorable price/mix impact and $24 million in favorable raw materials costs.
Net income fell 45.3% in the quarter to $29.3 million and 41.4% in the nine-month period to $77 million.
Cooper Tire President and CEO Bradley Hughes noted Cooper's third-quarter operating ratio was higher than that reported in the second quarter (7.5% versus 4.5%) "despite the continued impact of tariffs,"and should be higher again in the fourth quarter.