Cooper Tire & Rubber Co. said Monday its third-quarter net income fell 4.7 percent from the same period last year due mainly to higher raw material costs.
Despite the decline, the earnings beat Wall Street estimates., and its shares rose 5 percent by midday.
The company reported net income of $44.6 million, or 71 cents per share, for the quarter ended Sept. 30, down from $46.8 million, or 84 cents per share, in the year-ago period. Its earnings for last year were restated from 77 cents a share.
Revenue rose 10 percent to $883 million from $802.7 million as stronger pricing for its products offset decreased sales volumes.
Analysts polled by Thomson Reuters expected earnings of 60 cents per share on higher revenue of $895.1 million.
The company also said it would increase production next year by 10 percent over this year due to continued strong demand for its products.
"We expect raw material costs will continue to be elevated in the near future and have implemented price increases around the globe," CEO Roy Armes said in a statement.
The Findlay, Ohio, company said it will go for growth opportunities in global regions and with new products. It also said it will keep improving its cost structure. "Changing industry and economic conditions can still present challenges, but we remain optimistic about our opportunities to further improve results," Armes said.
Cooper Tire said its light vehicle tire shipments in the U.S. were down 1.8 percent for the quarter, but the company outperformed the industry, which was down 2.7 percent. North American tire operations made a $55 million operating profit, up $7 million from the third quarter of 2009, the company said.
Third-quarter earnings included $5 million in restructuring charges for the closing a plant in Albany, Ga.
Shares of Cooper Tire rose 99 cents, or 5.1 percent, to $20.60 in midday trading.
(businessweek.com)
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