Failed merger hits Cooper Tire earnings

cooper-tire-logoDaily Journal

FINDLAY, Ohio – More than three months after its third-quarter earnings report was supposed to be filed, Cooper Tire & Rubber Co. finally released the numbers.

The company said net sales for the quarter fell $263 million to $832 million. Operating profit plummeted $102 million to $28 million.

And Cooper posted a loss of $160,000 for the quarter, compared to a net profit of $74 million for the same period a year earlier.

A failed merger with India-based Apollo Tyres impacted the results, which were delayed because Cooper’s joint-venture plant in China went on strike last summer and refused to let Cooper officials in to retrieve financial data.

After the deal fell apart in December, Cooper’s Chinese partner in the company restarted talks to get workers to make Cooper-branded tires.

For the first nine months of 2013, Cooper’s operating profit was $194 million, compared with $273 million a year earlier.

“With the merger agreement terminated and operations returning to normal at CCT, we are resuming financial reporting and moving our business forward,” said Cooper Chairman, CEO and President Roy Armes. “As expected, issues surrounding the merger had a significant negative impact on our third-quarter results, and we anticipate some carry-over of these negative impacts to a lesser degree in the near term.”

Armes said despite the third-quarter setback, the company will post positive operating profit and net income in the fourth quarter.

Those results will be announced in mid-March.

Cooper said the work stoppage in China that lasted until Aug. 17 reduced operating profit by $29 million. The Apollo merger also cost the company another $5 million in the third quarter.

Cooper employs 1,600 workers at its Tupelo manufacturing plant.

Earlier this week, Cooper, along with Community Development Foundation officials, asked for $20 million in state money, plus another $18 million from Tupelo and Lee County to upgrade its plant in Tupelo.

The company promised to keep at least 1,300 jobs for 10 years.

Cooper is looking at investing $140 million worldwide for a modernization plan that would include Tupelo.