COOPER TIRE: PROFIT UP IN Q3 2017

Time: Oct 30th 2017   Copy editor: Tyrefull

Cooper Tire & Rubber Company has reported a net income of $62 million in Q3 2017 from $49 million reported in the same period last year. Consolidated unit volume decreased by two per cent compared to the prior year, with strong growth in the International segment that was more than offset by lower volume in the Americas segment, the company said.

Operating profit was $101 million, or 13.8% of net sales, which is an increase of $23 million from Q3 2016. Net sales decreased 2.3 per cent to $734 million. The quarter included a $39 million benefit in operating profit from lower product liability costs, primarily related to a reduction of the company’s product liability reserves. Cooper’s raw material index increased 6.4 per cent from the third quarter of 2016, with raw material costs increasing by $19 million from the prior year.

“Our third quarter performance, particularly the decline in North America unit volume, reflects continued challenges within the tyre industry, including raw material cost variability, weak trends in retail sell-out of tyres to consumers, elevated inventory in the channels and a fluid promotional landscape. These conditions were exacerbated by the hurricanes in Texas and Florida. We have an aggressive schedule of new product introductions underway that continues throughout 2018 and 2019. Cooper continues to believe that positive macro-economic factors, such as gas prices, miles driven, low unemployment, growing wages and others will support growth for the tyre industry,” said President & Chief Executive Officer Brad Hughes.

“We expect that operating margin in the fourth quarter will be below our previously stated expectations. Cooper will continue to price our products appropriately given market conditions and will remain focused on executing the programs we have in place to expand into additional channels. In addition, we will continue to manage our production levels and inventories, helping to position Cooper for a strong start to 2018,” he added.

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