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» Cooper Tire & Rubber CEO Discusses Q2 2011 Results - Earnings Call Transcript
In association with the press release, which was sent out earlier this morning, we will provide an overview of the company's quarterly operations and results. The press release contains a link to a set of slides that are a summary of information included in the press release and 10-Q. These slides are intended to help investors and analysts quickly obtain information. They will not be used as the focus of today's call.Following our prepared comments, we will open the call to participants for a question-and-answer session. Questions may also be directed to our email address, which is firstname.lastname@example.org. Today's call will begin with Roy providing an overview of our results. He will then turn it to Brad for a discussion on some of the details by segment and comments on other matters. Roy will then summarize and provide comments on our outlook. Now, let me turn the call over to Roy Armes. Roy Armes Thanks Stewart and good morning to everyone. Our second quarter results were very strong with the top line exceeding $1 billion a 15% increase over the same period a year ago. This growth contributed to record operating profit for both segments of our business in North America and international which demonstrates the strengthening of our business model and as a result of disciplined execution of our strategic plan. Our strong second quarter performance was driven by two key factors. The first is increased volumes. We experienced higher demand for our products across our portfolio during the second quarter. In fact growing demand resulted in U.S. light vehicle volumes increasing 16% over the second quarter a year ago, and the TBR volumes increased 5% for the quarter. International volumes also exhibited strong growth increasing 19% over the prior year second quarter and establishing a new record for the segment. This growth was achieved in the phase of weaker overall industry trends illustrating that the market place is increasingly recognizing a performance in value of our products. A second factor that’s possibly influenced our results was the decline in raw materials and commodity prices. As you know these prices begin to drop after the first quarter with natural rubber and polybutadiene prices experiencing the most dramatic declines. Obviously this drop in prices provided a tailwind for the industry and Cooper creating an improved balance between pricing of raw materials. Brad will have a lot more to say on this a little bit later on the call this morning.
So moving on to the operations. During the second quarter we generated net income attributable to Cooper Tire Rubber Company a $52 million or $0.82 per share which compares to net income of $12 million or $0.18 per share for the same period a year ago. The results during the quarter include the impact of a onetime $7 million pre-tax pension gain related to the curtailment of a plan in the U.K. which is approximately $5 million after tax.As I mentioned, consolidated net sales exceeded $1 billion which is up 15% from the same period a year ago, and this increase was driven by a 16% quarter-over-quarter rise in total company unit volume. Specifically, unit volumes were up 15% for the North American segment and 19% for our international segment. Our volume growth in United States was very strong relative to the industry light vehicle tire shipments which were essentially flat. We outperformed the industry which compared to RMA reported figures in the passenger and light truck categories including the broad line and UHP segments. Additionally, commercial truck sales of Roadmaster brand tires continue to gain market share increasing 5% from the prior year second quarter. Our international segment reported record unit volumes. Unit volume in Asia was driven by higher shipments and domestic and export PBR markets or a truck and bus radial tires, as well as continued successful efforts to expand distribution and supply of light vehicle tires in the Chinese market. Despite challenging economic conditions European volumes increased as we introduce production from our new Serbian plant which offset volume reductions in other European product lines. Read the rest of this transcript for free on seekingalpha.com