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Cooper Tire (CTB) Earnings Beat Estimates in Q2, Down Y/Y

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Cooper Tire & Rubber Co. (CTB - Free Report) has posted earnings of 30 cents per share in the second quarter of 2018, beating the Zacks Consensus Estimate of 24 cents. However, the bottom line was lower than the prior-year quarter’s figure of 85 cents per share.

Cooper Tire recorded net sales of $698 million, missing the Zacks Consensus Estimate of $675.4 million. However, the year-ago quarter’s net sales were $721 million.

Operating profit was $33 million in the second quarter of 2018, down 61.1% from the year-ago quarter.

Cooper Tire & Rubber Company Price, Consensus and EPS Surprise

 

Cooper Tire & Rubber Company Price, Consensus and EPS Surprise | Cooper Tire & Rubber Company Quote

Segment Details

Americas Tire Operations registered 5% decrease in net sales to $584 million. Operating profit in this segment declined 55.5% to $40 million while operating margin decreased from 14.8% to 6.9%.

International Tire Operations registered 10.9% rise in revenues to $168 million. Operating profit was $6 million, increasing from $3 million in the year-ago quarter. Operating margin rose to 3.4% from 1.8% in the year-ago quarter.

Financial Position

Cooper Tire had cash and cash equivalents of $180 million as of Jun 30, 2018, down from $302 million as of Jun 30, 2017. Capital expenditure decreased to $38 million in the second quarter of 2018 from $45 million in the year-ago quarter.

Share Repurchases

During the second quarter of 2018, the company spent $14 million for repurchasing 517,354 shares at a price of $26.66 per share. Between August 2014 and Jun 30, 2018, Cooper Tire brought back 15.7 million shares at an average price of $34.12 per share.

Outlook

Because of the industry challenges emanating from rising raw material expenses, the company expects unit volume to be flat in 2018 compared with 2017. A modest sequential improvement in operating profit margin is expected in the second half of 2018.

For 2018, capital expenditure is expected to be $200-$220 million, unchanged from the previous guidance. The effective tax rate for the year is expected to be 23-26%.

Cooper Tire currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are PACCAR Inc. (PCAR - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and AB Volvo (VLVLY - Free Report) . While both PACCAR and Fox Factory sport a Zacks Rank #1 (Strong Buy), Volvo carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PACCAR has an expected long-term growth rate of 10.8%. Over the past month, shares of the company have moved up 0.7%.

Fox Factory has an expected long-term growth rate of 15.8%. Shares of the company have risen 60.4% over the past year.

AB Volvo has an expected long-term growth rate of 15%. Over the past month, shares of the company have gained 2.1%.

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