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Cooper Tire (CTB) Q4 Earnings and Revenues Miss, Down Y/Y

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Cooper Tire & Rubber Company (CTB - Free Report) reported fourth-quarter 2020 adjusted earnings of 75 cents per share, which lagged the Zacks Consensus Estimate of 92 cents. The underperformance was attributed to weaker-than expected revenues and income from the American Tire Operations segment. The bottom line also declined from earnings per share of $1.02 recorded in the prior-year quarter. The company’s net sales slipped 3% year over year to $728.3 million for fourth-quarter 2020, mainly due to lower unit volumes. The reported figure also missed the Zacks Consensus Estimate of $748 million.

Key Takeaways

Net sales in Americas Tire Operations tailed off 3.9% year over year to $629 million on lower unit volume and unfavorable currency translations. The reported figure also missed the Zacks Consensus Estimate of $656 million. Operating profit in the segment declined 14% from the year-ago quarter to $72 million and fell short of the consensus mark of $77 million. Operating margin was 11.4% compared with the prior-year quarter’s 12.9%.

Revenues in International Tire Operations grew 14% from a year ago to $136 million due to higher unit volume and favorable forex impact. The unit registered operating profit of $3 million against operating loss of $6 million posted in the year-ago quarter. Operating margin was 2.4% versus negative 5% reported in the prior-year quarter.

Cooper Tire had cash and cash equivalents of $625.7 million as of Dec 31, 2020 compared with $391.3 million recorded in the comparable year-ago period. Capital expenditure for fourth-quarter 2020 increased to $55 million from the year-ago level of $47 million. As of Dec 31, 2020, long-term debt and finance leases amounted to $314.3 million, up from $309 million recorded at 2019-end.

Cooper Tire — which shares space with Goodyear Tire (GT - Free Report) , Bridgestone Corp (BRDCY - Free Report) and Michelin (MGDDY - Free Report) in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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