Cooper Tire has reported third-quarter 2020 net income of US$123m compared to US$29m for the same period last year.
Third Quarter Highlights:
- Global unit volume increased 0.5% compared to the third quarter of 2019
- Strong light vehicle unit volume growth of 9% in the US was offset by a unit volume decline in Latin America due to challenging market conditions and lower production levels as the company ramps up its plant in Mexico
- International segment unit volume increased 10.1%, led by Asia.
- Net sales increased 8.6% from the third quarter of 2019 to US$765m, with increases in both the Americas and International segments
- Operating profit was US$172m or 22.4% of net sales, compared to operating profit of US$53m, or 7.5% of net sales, in 2019
“Following a first half that was significantly impacted by the global pandemic, our third quarter performance reflected a strong rebound for Cooper, validating our strategic initiatives and our team’s ability to execute and react quickly to market opportunities,” said Cooper Tire president & CEO, Brad Hughes.
“As a result, in the US, our third quarter unit volume increase of 9% significantly outperformed the USTMA and exceeded the total industry. Beyond the benefit provided by an adjustment to our product liability reserves, lower raw material costs combined with favourable price, mix and volume, all contributed to a strong result for the quarter.
“Coming off an exceptionally strong third quarter and the coronavirus-related production disruptions earlier in the year, our inventory levels are lower than normal.
“In the near term, this will challenge our ability to meet continuing strong customer demand. We are leveraging our global manufacturing footprint and taking actions to increase production to meet the growing demand.”
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“The strength of our third quarter performance and the pandemic-related temporary plant closures earlier in the year have reduced our inventory levels, which will affect our ability to meet global demand for our tyres in the fourth quarter,” added Hughes. “This will result in modestly lower global unit volume for the second half of 2020 compared to 2019. Yet, we expect to achieve operating profit margin within our stated mid-term target of 10% to 14% for the second half 2020, excluding the US$49m benefit from the adjustment of our product liability reserves in the third quarter.
“Our strategic initiatives are unlocking the relevance of our brand with our customers and consumers, creating additional growth opportunities. We are on the right strategic path and our team will continue to drive our initiatives to achieve our long-term goals.”