Cooper Tire lowers North American production

Cooper Tire & Rubber Co said on Monday, June 23, it has reduced production in its North American facilities during the second quarter to counter decreased tire demand and projected shortages of certain raw materials.


The Findlay, Ohio-based company estimates the production curtailment costs to range between $12 million and $14 million in the second quarter.

On average, six analysts polled by First Call/Thomson Financial expect the company to report a loss of $0.13 per share for the second quarter.

In April, Cooper Tire reported a fall in its profit for the first quarter to $1.69 million, or $0.03 per share, from $20.8 million, or $0.33 per share in the prior-year quarter.

The company said it was primarily hurt by continued increases in raw material costs globally, increased charges for product liability claims related primarily to revised estimates on existing claims, and the decline in the volume of unit shipments in North America, particularly in March.

Recent changes in macroeconomic conditions in North America have created a new set of challenges for the company. Consumers have reduced the number of miles driven in reaction to the economic slowdown, and subsequently are delaying tire purchases.

The declining dollar's impact and other factors that have driven raw material prices to record-highs, particularly in natural rubber and oil-derived materials. In addition, the use of last-in, first-out cost flow assumptions for inventory accounting in North America has contributed to the increased volatility in expected earnings.

CTB closed Monday's regular trading session at $8.29, down $0.20 or 2.36% on a volume of 1.47 million shares.

• Cooper range of tyres