Cooper Tire & Rubber Co. said Thursday its net income sank 31 percent in the second quarter, as its prices and sales volumes fell while the company took one-time charges related to its sale to Apollo Tyres Ltd. of India.
Cooper Tire said revenue fell 16 percent from last year, and it said lower prices and a less favorable product mix hurt its net income. It also reported greater selling and administrative spending and higher manufacturing costs. The company took $7 million in charges connected to its sale to Apollo Tyres, which was announced last month. A year ago, Cooper Tire reported a one-time gain of $7 million after it curtailed a pension plan in the U.K.
Shares of Cooper Tire were off 35 cents to $33.54 in midday trading.
The company said its net income fell to $35.5 million, or 55 cents per share. A year ago, it reported a profit of $51.7 million, or 82 cents per share. Revenue decreased to $884.1 million from $1.06 billion.
Analysts were expecting net income of 89 cents per share and $963.6 million in revenue, according to FactSet.
The company said raw material costs fell by $120 million compared to a year ago, and it expects lower raw materials prices in the third quarter. However, Cooper Tire said the global economy is still weak, which is hurting sales volumes, while tire demand is “sluggish.”
Apollo Tyres Ltd. agreed to buy Cooper Tire for $35 per share, or about $2.2 billion. That was a 42 percent premium based on the latest closing price of Cooper Tire stock. The companies expect the sale to close before the end of 2013.