FINDLAY Cooper Tire & Rubber Co. lost $78.5 million in 2006, but the tiremaker s cost-cutting efforts were taking off by year s end and will gain speed, its new leader says.
Roy Armes, who became president and chief executive two months ago, told analysts and investors today he is more optimistic about the company after visiting its tire factories worldwide, talking with employees, and meeting customers.
The Findlay firm is on track to gain $170 million annually by the end of 2008 through cost cuts and profit improvements, such as changing its U.S. manufacturing strategy, Mr. Armes said. It had $17 million in savings last quarter and expects to boost the figure by $100 million this year, he said.
Our people are doing a good job leaning out our operations to become more competitive, the CEO said.
He added: We re very confident in the direction we re heading.
Cooper Tire had sales of $2.7 billion last year, up 24 percent from a year earlier.
Wall Street was pleased with the financial results. Its stock closed at $17.05 a share on the New York Stock Exchange, up $2.36. It set a new 52-week high, at one point reaching $17.49 a share.
Cooper Tire had a fourth-quarter operating profit of 33 cents a share, which was much stronger than the 2 cents a share analyst Himanshu Patel of J.P. Morgan Securities Inc. expected, he wrote in a research note.
A consensus of analysts polled by Thomson Financial Network expected the Fortune 1,000 firm s operations to break even last quarter.
Mr. Patel noted that Cooper Tire s North American sales were up 12 percent last quarter, which helped drive the clean earnings.
With charges related to its restructuring and write-offs, the company had a fourth-quarter loss of $27.6 million, or 45 cents a share, compared to $6.9 million, or 11 cents a share, a year earlier. Its sales were $739 million for the three-month period, up 29 percent from a year earlier after the firm added controlling interests in two Chinese tire operations in February.
The tiremaker s full-year loss of $78.5 million was $1.28 a share, compared to a 2005 loss of $9.4 million, or 15 cents a share.
Mr. Armes said company will pursue market-share gains this year, but it will not sacrifice profits to do so. Cooper Tire did gain a small but sustainable amount of sales as a result of Goodyear Tire & Rubber Co. s strike, he said.
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