Newly manufactured tires are loaded for shipment at the Findlay firm that reported a $120 million profit for 2007.
FINDLAY - At a time when many U.S. firms in the auto industry are bleeding red ink and filing for bankruptcy, Cooper Tire & Rubber Co. gave investors a reason to cheer yesterday.
The Findlay firm, which is among the nation's largest manufacturers of replacement tires for cars and trucks, reported that it made $120 million last year after two straight money-losing years culminated in 2006 with losses of $79 million.
"This is a staggering improvement," Chief Executive Officer Roy Armes told financial analysts during a conference call. "Our financial results continue to show dramatic improvements over previous years."
Annual revenues at the once-struggling firm rose 14 percent to a record $2.9 billion.
The rosier financial report was in line with those of other tire manufacturers, Himanshu Patel, a financial analyst at J.P. Morgan Securities in New York, said in a research note. Producers have been able to offset higher costs of rubber and other raw materials by raising tire prices and by selling more upper-end tires, the analyst wrote.
Investors reacted to the Cooper Tire's report by buying up its stock. About 2.5 million shares, or more than double the usual volume, exchanged hands on the New York Stock Exchange. Shares rose 37 cents, or 2 percent, to $19.48 on a day that the Dow Jones industrial average fell by 1 percent.
On a per-share basis, the Fortune 1,000 firm made $1.93 last year compared with a loss of $1.28 a share in 2006.
To help achieve the gains, the company cut expenses by $100 million last year, with an additional $70 million in cuts planned for 2008, officials said.
In the fourth quarter, Cooper Tire made $51 million, or 82 cents a share, on sales of $765 million. That compared with a loss of $28 million, or 45 cents a share, on sales of $715 million during the same period in 2006.
To deal with ongoing increases in raw-materials costs, the company raised tire prices again this month. Executives said they will continue to focus on maintaining profits, even if that means lower shipments.
They said the company will increase import of tires from plants in China that are owned jointly with others.
Asked about the impact of a possible recession, company officials said they are prepared but do not expect a serious economic downtown.
Industry analysts expect tire sales to increase 2 to 3 percent in 2008, they said.
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