Cooper posts losses in quarter and year, despite higher sales

Findlay, Ohio - Cooper Tire & Rubber Co. posted higher sales for the fourth quarter and full year in 2005, both corporate-wide and in its North American tyre operations, but reported losses in both periods.

The company said it expects 2006 sales to outpace industry growth, but the firm cautioned that earnings again will be affected negatively by raw material and energy prices. Nonetheless, Cooper foresees improved results over the 2005 net loss of $9.36 million on the positive effects of improvements in manufacturing efficiencies, product and customer mix and fill rates and increased product sourcing from low-cost sources as well as profitable international operations.

Cooper´s acquisition of majority ownership of Cooper Chengshan (Shandong) Tire Co. in China will add approximately $500 million in profitable sales annually from 2006, said Thomas Dattilo, chairman, president and ceo.

In the fourth quarter, Cooper's sales grew 5.7 percent to $572.4 million from $541 million in the year-ago period, but the Findlay-based tyre maker posted a loss from continuing operations of $6.5 million compared with earnings of $3 million in the 2004 period.

Cooper said operating profit was affected negatively by higher raw material costs, $6 million in scrap charges from a voluntary recall and $8 million from reduced operating levels at some North American plants, among other factors. Quarterly operating profits also were impacted positively by improved pricing and mix and by a $12 million gain from a settlement dispute with certain suppliers.

For the year, Cooper´s sales rose 4.8 percent to $2160 million as the company posted a loss of $15 million from continuing operations, down from earnings of $27 million in 2004. The firm said sales rose on higher prices and better product mix, but operating profit fell because of higher raw material costs, lower unit volumes and plant inefficiencies.

Cooper reported a net loss for the year of $9.36 million, compared with a profits of $201.4 million a year ago, which also were impacted by the fourth quarter gain from the sale of the automotive unit.

From Rubber & Plastics News (A Crain publication)

Press release from Cooper Tire