FINDLAY, Ohio (AP) — Cooper Tire & Rubber Co. said Friday its fourth-quarter profit rose 2.6 percent as stronger demand for its products helped offset rapidly rising raw materials costs. The company is also raising tire prices next month for the second time this year and plans to boost production.
Citing high raw materials costs, Cooper Tire plans an average U.S. price increase of 8 to 9 percent depending on product, effective March 15. This is on top of a 2.5 percent increase on Feb. 1 for most light vehicle products.
Its shares rose 16 cents to $23.02 in morning trading.
The Findlay, Ohio, company reported net income rose to $40.2 million, or 64 cents per share, compared with $39.2 million, or 63 cents per share, in the same period of 2009.
Analysts polled by FactSet expected higher earnings of 67 cents per share.
Revenue rose 19 percent to $919.6 million from $773.1 million. Analysts expected revenue of $850.5 million.
The fourth-quarter results included $1 million in restructuring charges mainly for closing a factory in Albany, Ga. The company reported $12 million in restructuring costs in the fourth quarter of 2009, it said in a statement.
The company said higher raw materials costs for the quarter were partially offset by better pricing and increased sales volume.
"We were able to deliver positive results during the fourth quarter despite the beginnings of rapid increases in raw material costs, particularly natural rubber," CEO Roy Armes said in a statement. "Demand for our products continued to be very strong and we were able to run the manufacturing facilities efficiently to deliver improved manufacturing results."
The price of natural rubber, which is used in combination with synthetic rubber to make tires, rose more than 75 percent in the past four months, the company said. Overall, raw materials costs rose in price 15 to 20 percent from the fourth quarter to the first quarter of this year, but the rate of increase should slow during the second quarter, the company said.
The company plans to raise production 10 percent this year to meet stronger demand for its products, Armes said.
For the full year, Cooper Tire reported net income of $140.5 million, or $2.24 per share, more than double the $51.8 million, or $1.02 per share, in 2009. Revenue rose 21 percent to a record $3.36 billion from $2.78 billion in 2009.
Copyright 2011 The Associated Press. All rights reserved.
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