Cooper Tyre & Rubber Company has recorded full-year 2016 net income of US$248m, compared with US$213m 12 months ago.
The full year results included non-cash pension settlement charges of US$12m. Excluding these charges, diluted earnings per share for the full year would have been US$4.66 per share.
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Fourth Quarter 2016 Highlights:
. Unit volume up 7.7%, with increases in both the Americas and International segments.
. Net sales increased 1.1% to US$784m.
. Operating profit of US$105m, or 13.4% of net sales.
. US$25.5m of company stock repurchased.
Full Year 2016 Highlights:
. Unit volume up 2.6% year to year, driven by strong domestic volume increases in Asia and Latin America.
. Net sales of US$2.92bn compared with US$2.97bn in the prior year.
. Including US$12m in non-cash pension settlement charges, operating profit was US$384m, or 13.1% of net sales, representing an 8.4% increase over the prior year and a record operating profit margin for the company.
. Excluding US$12m in non-cash pension settlement charges, operating profit was US$397m, or 13.6% of net sales, representing an 11.9% increase over the prior year.
. US$108m of company stock repurchased during the year.
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By GlobalData“Through consistent execution of our strategic plan, and the favourable raw material cycle of the past few years, Cooper ended 2016 in a very strong position, achieving a record full year operating profit margin of 13.1%,” said Cooper Tire president and CEO, Brad Hughes.
“Our profit performance was led by record operating profit in our Americas segment and substantial profit improvement in the International segment.
“In addition, we delivered unit volumes that were up nearly 8% in the fourth quarter, led by double-digit domestic growth in Asia and Latin America.
“We also continued to return cash to shareholders through our balanced capital allocation program, and remained good stewards of capital, as reflected in our 18.9% return on invested capital for 2016.
“Looking ahead, we expect raw material costs—which began to increase sharply toward the end of 2016—to continue to rise in 2017. We are confident in the strength of the Cooper business model, which has led to positive mix transformation, improved speed to market with exciting new products, cost efficiencies, and other advances.
“These business model improvements will help Cooper succeed during this period of rapidly rising raw material costs. However, we do expect rising raw material costs to impact results in the short term, until pricing adjusts for such costs.
“With raw material cost increases that we believe will level off later this year, and pricing actions by Cooper and competitors beginning to take place, we anticipate full year 2017 operating profit margins will be at the high end of our previously projected 8% to 10% range.
“This is based on operating profit margins around the low end of this range in the first half of the year, as pricing lags raw material cost increases, and operating profit margins above the high end of this range in the second half of the year, when we expect raw material costs to level off and pricing to begin to catch up.
“Cooper remains committed to delivering shareholder value as demonstrated by our announcement this morning to increase and extend our share repurchase programme to US$300m in common stock through 31 December 2019.”
