Nov. 7 (Bloomberg) -- Cooper Tire & Rubber Co., the second- largest U.S. tiremaker, reported a third-quarter net loss of $55.4 million on slowing demand, ``unprecedented'' increases in raw-materials costs and production disruptions from hurricanes.

The deficit was 94 cents a share, compared with net income of $30.2 million, or 48 cents, a year earlier, the Findlay, Ohio-based company said today in a statement. Sales rose 3.4 percent to $793.8 million on pricing gains.

The loss reflects weakening demand for replacement tires and higher costs for rubber and other supplies, which shaved $104 million from North America results. Cooper said Oct. 21 it may consolidate some U.S. plants and cut jobs as demand fades, and today said capital spending was ``significantly'' reduced.

``Our business has come under intense pressure from several fronts including increased raw material costs, decreased global demand, and more intense competition,'' Chief Executive Officer Roy Armes in the statement.

Analysts expected a 92-cent loss, based on the average of 4 estimates compiled by Bloomberg.

The company hasn't had to draw down on existing credit lines and maintains ``cash reserves to support our plans,'' Armes said in the statement.

`Ample Potential'

Cooper rose $1.11, or 17 percent, to $7.79 at 4:00 p.m. in New York Stock Exchange composite trading. The stock has declined 53 percent this year.

With the price increases and cost cutting, ``we think there remains ample potential for Cooper to produce significantly higher earnings in the back half of 2009 and early 2010,'' Anthony Cristello, a BB&T Capital Markets analyst based in Richmond, Virginia, said in a note to investors today.

He rates the shares ``hold.''

Revenue in North America was up 1.7 percent to $586.2 million, even as consumers ``reacted to the credit crisis and increased gas prices'' by reducing purchases, according to the statement.

Sales outside North America gained 21 percent to $284.7 million. Cooper got about 28 percent of its sales from Europe and Asia last year.

The company said it invested in a plant in Mexico during the quarter as part of a plan to help trim production costs. Cooper, which said in June it would spend $31 million on a Mexican factory, didn't specify today how much it put into those operations.

The company said Oct. 21 that all U.S. factories would be reviewed during the following 90 days on issues such as long- term financial outlook, labor relations and productivity. Cooper, which had outlined a plan in February to boost profitability, said economic conditions since then ``resulted in surplus capacity in our U.S. facilities.''

Goodyear Tire & Rubber Co. is the largest U.S. tiremaker.

(Cooper Tire will hold a conference call at 11 a.m. New York time to discuss third-quarter results. The call is available on the investor-relations page at http://www.coopertire.com.)

To contact the reporter on this story: Alex Ortolani in Southfield, Michigan, at aortolani1@1bloomberg.net

Last Updated: November 7, 2008 16:23 EST