Cooper Tire shares drop on disappointing earnings report

FINDLAY, Ohio—Shares of Cooper Tire & Rubber Co. tumbled Wednesday after the company announced a steep drop in first-quarter profit, blaming a drop in sales and rising raw material costs.

Cooper shares tumbled 96 cents, or 7 percent, to $12.75, after dropping as far as $12.63 earlier in the day and passing its previous 52-week low point of $12.85.

Cooper's profit of 3 cents per share was less than half of the average analyst estimate of 10 cents per share. Revenue totaled $679.3 million, slightly less than the $680.4 million analysts predicted.

Tire sales in North America fell 3 percent and operating profit was about a third of what it was a year ago. At the same time, international sales jumped 27 percent on price and production increases.

Also on Wednesday, Standard & Poor's Analyst Efraim Levy cut his rating for Cooper to "Hold" from "Buy" and cut his price target to $9 from $17, citing the disappointing quarterly results.

"We see margins benefiting from cost cutting and greater China tire production, but view higher raw material, energy, pension and health care and other expenses and weaker-than-expected industry volume with caution," Levy wrote in a note to investors.