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Will Cooper Tire (CTB) Spring a Surprise in Q2 Earnings?

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Cooper Tire & Rubber Co. (CTB - Free Report) is set to report second-quarter 2017 results after the market closes on Aug 4. Last quarter, the tire manufacturer delivered an earnings miss of 17.39%

In the trailing four quarters, the company beat estimates in three and missed in one, resulting in an average positive earnings surprise of 10.48%.

Let us see, how things are shaping up for this announcement.

Cooper Tire & Rubber Company Price and EPS Surprise

Factors Influencing this Quarter

Cooper Tire continues to develop great products with superior design and functionality in order to satisfy the market demand in all regions. In Mar 2017, the company added a new tire to the Roadmaster Line. It also projects unit volume growth in the U.S to better relative to the industry in the second quarter and be in line with the industry from the second half of the year.

The company also focuses on expanding business across Asia and Latin America. The tire market in Latin America is expected to grow to approximately 175 million units by 2020 from 140 million units in 2014. Further to capitalize on this, the company has been developing products for the region.

However, the company fights many challenges, including volatile raw material price, a turbulent global market and uncertainty regarding trade policies, which are expected to hurt the second-quarter earnings.

Earnings Whispers

Our proven model does not conclusively show whether Cooper Tire is likely to beat or miss estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below:

Zacks ESP: Cooper Tire has an Earnings ESP of 0.00% as both the Most Accurate estimate of and the Zacks Consensus Estimate are at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Though Cooper Tire’s Zacks Rank #2 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Price Performance

Cooper Tire’s stock has decreased 2.5% in the last three months, thereby outperforming the 6.8% decline of the industry it belongs to.

Stocks to Consider

Per our model, some companies worth considering from the same space with the right combination of elements to come up with an earnings beat this quarter are:

Axalta Coating Systems Ltd. (AXTA - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is expected to report second-quarter 2017 results on Aug 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical Corporation (WLK - Free Report) has an Earnings ESP of +5.04% and a Zacks Rank #2. Its second-quarter 2017 financial results are expected to release on Aug 3.

Endeavour Silver Corporation (EXK - Free Report) has an Earnings ESP of +100.00% and a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Aug 3.

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