Cooper Tires & Rubber today issued a news release commenting on its first quarter results, which will be reported on May 7.
As a result of the challenging economic environment, the Company expects to report modest earnings for the quarter ended March 31, 2008. Our current estimate is considerably below expectations, due primarily to continued increases in raw material costs globally, increased charges for product liability claims related primarily to revised estimates on existing claims, and the decline in the volume of unit shipments in North America, particularly in March. Recent changes in macroeconomic conditions in North America have created a new set of challenges for our Company. Consumers have reduced the number of miles driven in reaction to the economic slowdown, and subsequently are delaying tire purchases. The declining dollar’s impact and other factors that have driven record-high raw material prices, specifically, in natural rubber and oil-derived materials, coupled with the use of last-in, first-out cost flow assumptions for inventory accounting in North America, have all contributed to the increased volatility in expected earnings.