CHICAGO - Cooper Tire & Rubber Co. said on Thursday its first-quarter earnings fell on weak tire demand and higher costs for raw materials and energy.
The second-largest U.S. tiremaker also said it expects tire industry conditions to remain tough in the second quarter.
"Raw material prices will be higher still and tire demand is likely to remain soft," said Cooper chairman, president and CEO Thomas A. Dattilo in a statement.
He said conditions should improve in the second half of the year as raw material prices begin to decline, pent-up tire demand emerges, and the company's new high-performance tire initiatives begin to pay off.
Findlay, Ohio, reported first-quarter net income of $15 million, or 21 cents a share, compared with $26.1 million, or 36 cents a share, a year ago.
Results were in line with Cooper's March 28 warning that it would earn 17 cents to 21 cents a share. At that time, analysts' average estimate was 25 cents.
Analysts' most recent estimates ranged from 17 cents to 20 cents a share, with an average of 19 cents, according to market tracker Thomson First Call.
Sales dropped to $795 million from $813 million, with most of that occurring in Cooper's tire division. Total tire unit volume dropped 11 percent, pulling sales down to $396 million from $433 million a year ago.
Cooper said some of the decline occurred because dealers shifted sales from the first quarter into last year's fourth quarter to avoid a January price increase.
Operating profit at the tire division plummeted to $16 million from $43 million a year ago. Lower volumes accounted for $8 million of the drop in operating profit, with higher raw material costs trimming $10 million and higher energy costs cutting $4 million.
Cooper's automotive group, which makes various auto components, boosted sales to $404 million from $386 million. It credited net new business in North America and Europe and favorable foreign currency exchange rates.
The unit's first-quarter operating profit rose 8 percent to $23 million as a result of higher volume and various cost-saving moves.
Cooper Tire shares closed Wednesday at $13.37.