DOW JONES NEWSWIRES
Cooper Tire & Rubber Co. (NYSE:CTB) (CTB) cut production in its North American facilities during the second quarter because of lower demand for tires and projected shortages of some raw materials.
The company estimated that the curtailments will cost $12 million to $14 million.
Cooper's shares were at $8.18, down 1.3%, in after-hours trading. Earlier Monday, the stock fell to $8.01, the lowest level since August 2006.
Not only are fewer new vehicles selling, but the soft economy is also taking the air out of replacement tire purchases. Shipments of car tires from the plant to stores fell an estimated 10%, while light truck tires dropped 19% during May, compared with the same period a year ago, according to CRT Capital Group analyst Kirk Ludtke.
Last month, Cooper reported a 92% drop in first-quarter profit amid increasing material prices, product liability costs and a slump in North American demand.
The company has been trying to move its business from lower-end, less- profitable tires to more higher-end tires, sold to drivers of luxury cars and sport-utility vehicles, which have helped insulate competitor Goodyear Tire & Rubber Co. (NYSE:GT) (GT) from falling demand.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; kathy.shwiff@dowjones.com
(END) Dow Jones Newswires 06-23-08 1835 Copyright (c) 2008 Dow Jones & Company, Inc.
