Selling fewer tires, Cooper Tire & Rubber Co.’s profit fell 67 percent in the April-June quarter from a year earlier to $15 million, the company reported today.
Earnings translated to 30 cents per diluted share.
Sales declined 3 percent last quarter from a year earlier to $698 million.
Cooper Tire’s quarterly sales have declined from year-earlier periods for six consecutive quarters.
“While challenging industry conditions have continued longer than expected, we are confident in our strategic plan,” said Brad Hughes, chief executive officer of Cooper Tire.
That plan includes expanding into new sales channels and boosting sales by accelerating the pace at which it introduces new products, he said.
“Cooper is launching 18 new products over the next 24 months, and introducing mid-cycle product refreshes to meet the evolving needs of our customers and consumers,” Hughes said.
“We would expect that these are going to improve our competitiveness in every segment that were introducing one of these new products,” he said. “So we would anticipate that that is going to help with (sales) volumes.”
Cooper also is making itself a bigger presence for online shoppers. It is on the Tire Rack and Tire Buyer websites.
It is working on developing additional ways of reaching consumers through online advertising.
“We recently established a dedicated digital marketing team within Cooper to build on the work we have been doing in this area,” Hughes said.
Cooper also is dealing with some things beyond its control. Oil price volatility and tariffs on steel are causing Coopers expenses for raw materials to rise faster than expected, said Ginger Jones, chief financial officer.
It appears that Cooper could be dealing with President Trumps tariffs for a while.
“Tariffs have been enacted on certain supplies and there are proposed tariffs that represent further risks with respect to raw materials and to tire imports,” Hughes said.
Cooper will likely increase tire prices to offset its bigger expense. Hughes said it is yet uncertain when that would happen. The company must be careful about timing of any price increases.
“We need to as weve learned a couple of times be very prudent about when it’s appropriate for Cooper to come into the market with its pricing,” Hughes said.
“We will (be prudent) and we will be there (with price hikes at the right time), but we want to do it in a way that is going to be competitive against other actions that are taking place.”