Cooper Tire & Rubber Company (NYSE: CTB)
today reported results for the third quarter of 2013. Net sales were $832 million, a decrease of $263 million compared with the same period in 2012. Operating profit for the third quarter was $28 million, which is $102 million lower than the same period in 2012 and 3.4% of net sales. The company reported a net loss attributable to Cooper Tire & Rubber Company of $168,000 in the third quarter. This compares with a net profit of $74 million, or $1.17 per share, for the same period in 2012. For the first nine months of 2013, operating profit was $194 million compared with $273 million for the same period in 2012.
“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, Chief Executive Officer 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,” he said. “Still, our business model remains resilient and we will report positive operating profit and net income for the fourth quarter and second half of 2013. We will also end the year with a strong balance sheet, which is important as we continue to invest in our business and focus on delivering value to stockholders.”
Third quarter operating profit was impacted by a number of unusual items including actions at the CCT joint venture in Rongcheng, China that took place in response to the merger agreement. On July 13, 2013, workers at CCT began a temporary work stoppage. When they returned to work on August 17, 2013, workers resumed production but excluded Cooper brand products. These actions reduced operating profit during the third quarter by $29 million, including $22 million from lower volume and $7 million from manufacturing inefficiencies. Cooper also incurred $5 million of expenses associated with the merger during the third quarter.