FINDLAY — Lower sales and higher operating costs cut Cooper Tire & Rubber Co.'s second quarter profits by more than 31 percent, the company said today.
Cooper said it earned $35.5 million in the quarter, or 55 cents per share. In the second quarter of last year, Cooper posted a profit of $51.7 million, or 82 cents per share.
One reason for the big drop in profit was a 16 percent decrease in net sales. Cooper said its sales for the quarter were $884 million, compared with $1.1 billion in the second quarter of 2012. And while Cooper's raw material costs were considerably lower in the quarter, some of those gains were offset by lower pricing. The company also reported higher selling, general, and administrative expenses, including higher manufacturing costs and costs related to increase distribution capacity, primarily in China.
Cooper also said it had $7 million in expenses related to the company's pending acquisition by Apollo Tyres Ltd. That $2.4 billion, all-cash deal is expected to be completed by the end of the year. Apollo will pay $35 per share for all outstanding Cooper stock.
In a statement, Roy Armes, Cooper's President and Chief Executive Officer said the second quarter was "one of challenge for the economy, the tire industry, and Cooper as we continued to navigate through a tough business environment."
Mr. Armes also praised the deal in place with Indian-based Apollo. Together the combined company will have total revenues
“We are excited about the long-term growth opportunities the pending merger will create and expect it to close before the end of this year," Mr. Armes said.