Cooper Tire & Rubber Co. Reports USD 248M net income for FY-2016.
Cooper Tire & Rubber Co. has reported full year 2016 net income of $248 million, or diluted earnings per share of $4.51, compared with $213 million, or $3.69 per share, one year ago. The full year results included non-cash pension settlement charges of $12 million. Excluding these charges, diluted earnings per share for the full year would have been $4.66 per share.
“Through consistent execution of our strategic plan, and the favorable raw material cycle of the past few years, Cooper ended 2016 in a very strong position, achieving a record full year operating profit margin of 13.1 percent. Our profit performance was led by record operating profit in our Americas segment and substantial profit improvement in the International segment,” said President and CEO Brad Hughes. “In addition, we delivered unit volumes that were up nearly 8 percent in the fourth quarter, led by double-digit domestic growth in Asia and Latin America. We also continued to return cash to shareholders through our balanced capital allocation program, and remained good stewards of capital, as reflected in our 18.9 percent return on invested capital for 2016. I am proud of the work our teams around the globe did throughout 2016 to deliver these great results.
“Looking ahead, we expect raw material costs — which began to increase sharply toward the end of 2016 — to continue to rise in 2017. We are confident in the strength of the Cooper business model, which has led to positive mix transformation, improved speed to market with exciting new products, cost efficiencies, and other advances. These business model improvements will help Cooper succeed during this period of rapidly rising raw material costs. However, we do expect rising raw material costs to impact results in the short term, until pricing adjusts for such costs. With raw material cost increases that we believe will level off later this year, and pricing actions by Cooper and competitors beginning to take place, we anticipate that full year 2017 operating profit margins will be at the high end of our previously projected 8 to 10 percent range. This is based on operating profit margins around the low end of this range in the first half of the year, as pricing lags raw material cost increases, and operating profit margins above the high end of this range in the second half of the year, when we expect raw material costs to level off and pricing to begin to catch up. As a reminder, in the United States, we use the LIFO accounting method, charging the most recent costs against sales, which impacts profits more quickly than other inventory accounting methods.
“Cooper remains committed to delivering shareholder value as demonstrated by our announcement this morning to increase and extend our share repurchase program to $300 million in common stock through Dec. 31, 2019. This action reflects our confidence in Cooper’s financial strength and in the long-term success of our business,” Hughes concluded.