Cooper beats 1Q expectations
Tire maker recovered from failed merger; upbeat for future
5/3/2014FINDLAY — Cooper Tire & Rubber Co. seems to have mostly recovered from the fallout of last year’s failed merger attempt with a tire maker from India, reporting a first-quarter profit Friday that easily beat expectations and sent shares soaring to their highest level in more than six months.
The tire manufacturer rolled to a profit of $45 million, or 71 cents per share, on sales of $796 million. Cooper fell short of last year’s results, when it earned $56 million on sales of $862 million, but officials said it was an especially tough comparison based on last year’s strong first quarter.
Though international volumes dropped, officials said total shipments rose 5 percent in North America. Lower prices negatively affected total sales, however.
The company is confident it will meet or exceed industry growth for the rest of the year.
Investors met the results positively, pushing Cooper shares up 6.76 percent to close the day at $27.48. That’s the highest close for Cooper since Oct. 4, the day news broke that the merger deal was heading to court.
Cooper officials said they were pleased with the company’s start to the year.
“These are signs Cooper has moved on, and we’re moving our business forward in the right direction,” Chief Executive Officer Roy Armes said during a conference call with investors and analysts.
The company struggled in the second half of last year as the now-aborted merger with India’s Apollo Tyres Ltd. caused labor unrest and production issues in China, and delayed financial reporting.
Some effects of that still lingered in the quarter. Sales of the firm’s Roadmaster commercial truck tires — which are made in China — tumbled by more than 90 percent.
Cooper officials said Friday that production is back to normal, but the firm couldn’t ramp up production and ship enough tires in time to get significant first-quarter sales.
Cooper did, however, benefit from slightly lower raw material costs in the first quarter. Officials said they expect stable prices for the remainder of the year.
The company also recognized this year as its 100th year in operation. Mr. Armes thanked his employees for their recent work to get Cooper back on track, as well as recognizing their past contributions.
“As we celebrate our centennial, the contributions of our people certainly comes to the forefront, and I want to thank all Cooper employees around the world, past and present, for the role they have played in our success throughout all these years,” he said.
Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134 or on Twitter @BladeAutoWriter.