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Cooper Tire (CTB) Q3 Earnings Surpass Estimates, Down Y/Y

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Cooper Tire & Rubber Co. (CTB - Free Report) has posted earnings of $1.07 per share in the third quarter of 2018, beating the Zacks Consensus Estimate of 45 cents. However, the bottom line was lower than the prior-year quarter’s figure of $1.18 per share.

Cooper Tire recorded net sales of $738 million, missing the Zacks Consensus Estimate of $747 million. However, the top line came in higher than the year-ago quarter’s net sales of $734 million.

Operating profit was $81 million in the third quarter of 2018, down 26.7% 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 0.5% increase in net sales to $629 million. Operating profit in this segment declined 30.1% to $87 million while operating margin decreased from 20% to 13.9%.

International Tire Operations registered 0.6% decline in revenues to $162 million. Operating profit was $6 million, increasing from $2 million in the year-ago quarter. Operating margin rose to 3.7% from 1.3% in the year-ago quarter.

Financial Position

Cooper Tire had cash and cash equivalents of $208.6 million as of Sep 30, 2018, down from $258.4 million as of Sep 30, 2017. Capital expenditure decreased to $46 million in the third quarter of 2018 from $53 million in the year-ago quarter.

Share Repurchases

During the third quarter of 2018, the company spent $1 million for repurchasing 31,154 shares at a price of $26.59 per share. Between August 2014 and Sep 30, 2018, Cooper Tire brought back 15.8 million shares at an average price of $34.11 per share.

Outlook

For fourth-quarter 2018, Cooper Tire anticipates unit volume to grow in the United States. This is likely to be offset by persistent volume declines in other regions. The company continues to expect an impact from higher raw material costs. It expects fourth-quarter 2018 operating margin to be close to the prior-quarter level.

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 #2 (Buy).

A few other top-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Advance Auto Parts, Inc. (AAP - Free Report) and AutoZone, Inc. (AZO - Free Report) . While Allison Transmission sports a Zacks Rank #1 (Strong Buy), both Advance Auto Parts and AutoZone carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have surged 12.7%.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Over the past six months, shares of the company have risen 43.8%.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have risen 19.1%.

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