FINDLAY, Ohio — Cooper Tire & Rubber Co. swam against the current last year, reporting 32.8% higher operating earnings for the year ended Dec. 31.
Cooper's earnings improvement came despite 8.4% lower sales. Cooper cited measurable bottom-line increases in raw materials purchases and the price/mix component for the overall improvement in operating income. Offsetting these improvements were the negative impacts of lower sales volumes and reduced manufacturing output.
Operating income improved to $230.9 million on sales revenue of $728.3 million, raising the operating ratio three full points to 9.3%. Net income fell 28.6% to $37.7 million, or 75 cents per share.
Global unit volume fell 13% versus 2019, Cooper said.
"In 2020, Cooper continued to build upon the positive momentum that began in 2019, driven by execution of our strategic initiatives, which have successfully transformed Cooper into a consumer-driven company," Cooper President and CEO Brad Hughes said.
"Despite impacts from coronavirus, we delivered strong operating profit performance for the year and demonstrated that the value proposition of providing high-quality tires at an affordable price is compelling for consumers, especially in the current environment."
Business in the Americas fell 7.8% for the year to $2.17 billion, Cooper said, but operating profit jumped 17.8% to $280.3 million, or a ratio of 12.9%
In the quarter ended Dec. 31, Cooper's operating profit slipped 5.2% to $60.3 million, on 2.9% lower sales of $728.3 million.
Fourth quarter net sales were negatively impacted by $74 million of lower unit volume, partially offset by $48 million of favorable price and mix and $4 million of favorable foreign currency impact, Cooper said. Operating profit included $22 million of unfavorable raw material costs, which were offset by $22 million of favorable price and mix, $7 million of lower manufacturing costs and $3 million of lower product liability expense.
These were more than offset by $12 million of lower unit volume and $2 million of higher selling, general and administrative (SG&A) expenses.
Fourth quarter sales in the Americas segment fell 3.9% on lower unit volume and an unfavorable foreign currency impact, which were offset partially by $58 million of favorable price and mix. For the quarter, segment unit volume was down 12.5% versus the 2019 quarter.
Cooper said its light vehicle tire shipments in the U.S. in the quarter dropped 10.9%, and thus the company lost market share versus the industry as industrywide shipments fell just 0.5%, according to U.S. Tire Manufacturers Association data.
Cooper did not issue a fiscal 2021 forecast owing the pending agreement to sell to Goodyear.