Cooper Tire Posts Loss On Lower Sales, Expenses

(RTTNews) - Cooper Tire & Rubber Co. (CTB) said Friday it slipped to a loss for the third quarter, hurt by lower sales, costs related to its aborted merger with Apollo Tyres and a higher tax rate. Sales for the quarter also missed Wall Street estimates.

Moving forward, Cooper expects to report positive results for the current quarter even as some effects linger from the failed deal with Apollo.

Cooper shares were down over 2 percent in after-hours trade on the New York Stock Exchange.

Sales in the recent quarter were hurt by weak pricing and volumes as Cooper grappled with deficient ERP deployments as well as competition that impacted private-label and lower-priced products in North America.

Results were also hurt by the annulled $2.5 billion merger deal with India-based Apollo Tyres, including issues at the Cooper Chengshan (Shandong) Tire Co. Ltd. joint venture that reduced operating profit by $29 million. Cooper also incurred $5 million in merger costs.

Findlay, Ohio-based Cooper posted a third-quarter net loss of $168 thousand or breakeven per share, compared with a profit of $74 million or $1.17 per share last year.

On average, three analysts polled by Thomson Reuters expected earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter slid to $832.4 million from over $1 billion in the prior year. Analysts estimated sales of $876.85 million for the quarter.

Results were also impacted by a higher tax rate at 84 percent.

Cooper said raw material prices in the quarter were down about 8.1 percent from last year. In the current quarter, Cooper expects prices to come down about 1 percent sequentially.

In June, Cooper agreed to be acquired by Apollo Tyres for $2.5 billion, but in December it terminated the deal due to persistent differences over the offer price.

The matter went to court as Apollo asked Cooper to reduce the price consideration due to labor issues in the U.S. and problems at its Chinese joint venture. Had the deal closed, it would have created the world's seventh-largest tire company.

Cooper stock closed Friday at $24.93, up $0.02 or 0.08%, on a volume of 1.6 million shares on the NYSE. In after hours, the stock dropped $0.54 or 2.17% at $24.39. In the past year, the stock has traded in the range of $20.55 - $34.79.