Cooper Tire & Rubber Q1 net income $41 million
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First quarter 2015 operating profit was $70 million.
CCT contributed $157 million to net sales, net of intercompany eliminations, in the first quarter of 2014. Excluding CCT, first quarter 2015 sales rose 4 percent as a result of higher unit volume of $35 million, which was partially offset by negative foreign exchange of $7 million.
First quarter 2015 operating profit was $70 million compared with $81 million for the same period last year, which included $21 million from CCT. First quarter operating margin was 10.6 percent versus 10.2 percent in 2014. Excluding the impact of CCT, operating profit increased $10 million from favorable raw material costs of $46 million and higher volume of $4 million.
These benefits were partially offset by $16 million of higher manufacturing costs, unfavorable price and mix of $15 million, higher product liability costs of $4 million, higher selling, general and administrative (SG&A) costs of $3 million, and an increase in other costs of $2 million, including negative foreign exchange impact.
The effective tax rate for the first quarter, including discrete items, was 34.8 percent compared with 30.4 percent last year. The rate in 2015 is higher due to the mix of income, and is based on forecasted annual earnings and tax rates for various tax jurisdictions.
SG&A expense for the quarter was $62 million, or 9.3 percent of sales, compared with $66 million, or 8.3 percent of sales, in the first quarter of 2014. SG&A expense in the first quarter of 2015 was impacted by unfavorable mark-to-market costs of stock-based liabilities of $4 million.
At quarter end, Cooper had $449 million in cash and cash equivalents, compared with $336 million at March 31, 2014. During the first quarter, the company completed the accelerated share repurchase program announced in August 2014. Under that program, the company repurchased 6.4 million shares at an average cost of $31.49 per share.
The company announced a new $200 million share repurchase program in February 2015. During the first quarter, 313,405 shares were repurchased under that program for $12.4 million, or an average price of $39.41 per share. Capital expenditures in the first quarter were $48 million compared with $40 million last year. ■