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Cooper-Standard (CPS) Q3 Earnings Miss Estimates, Down Y/Y

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Cooper-Standard Holdings Inc. (CPS - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.05, missing the Zacks Consensus Estimate of $2.50. Further, the bottom-line figure was lower than the year-ago quarter figure of $2.11 per share. Results in the reported quarter were impacted by challenging market conditions in Asia and Europe, and rising commodity costs.

Revenues decreased 0.8% year over year to $861.7 million. The decline in sales was primarily owing to unfavorable exchange rate fluctuations, unfavorable volume and mix in Asia and Europe, and customer price reductions, which were partly offset by favorable volume and mix in North America.

During the reported quarter, adjusted net income was $19.1 million, down from the prior-year quarter figure of $39.5 million. The company launched 51 customer programs and grabbed net new business awards, totaling $91 million. Adjusted EBITDA declined 27.6% to $26.5 million compared with the third quarter of 2017.

Cooper-Standard Holdings Inc. Price, Consensus and EPS Surprise

 

Cooper-Standard Holdings Inc. Price, Consensus and EPS Surprise | Cooper-Standard Holdings Inc. Quote

Segment Performance

Sales in the North America segment increased 7.8% to $471.6 million. The year-over-year rise in sales was mainly due to favorable volume and mix, and incremental sales related to acquisitions.

Sales in the Europe segment were $228.3 million in the third quarter compared with $254.4 million in third-quarter 2017. The decline was mainly due to unfavorable foreign exchange, and volume and mix.

The Asia Pacific segment reported sales of $136.2 million in the reported quarter, down from $148.5 million in third-quarter 2017. The year-over-year decrease was mainly due to unfavorable volume and mix, and unfavorable foreign exchange.

The company’s South America segment reported sales of $25.6 million during the reported quarter, down from $28.7 million in third-quarter 2017.  The fall was due to unfavorable foreign exchange.

Financials

Cooper-Standard had $282.4 million of cash and cash equivalents as of Sep 30, 2018, compared with $516 million as of Dec 31, 2017. The company had long-term debt of $727.2 million as of Sep 30, 2018, compared with $723.3 million recorded as of Dec 31, 2017.

2018 Outlook

The company anticipates sales of $3.63-$3.68 billion in 2018. The prior guidance was of $3.60-$3.70 billion. It changed the 2018 adjusted EBITDA margin guidance to 10.5-11.0% from the prior guidance of 12.7-13.0%.

Further, the company expects capital expenditure (as a percent of sales) of 5.9-6.0% in 2018. The prior guidance was of 5.7-5.9%.

Zacks Rank & Key Picks

Cooper-Standard currently carries a Zacks Rank #5 (Strong Sell).

A few better-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 (Buy). 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 8.8%.

Advance Auto Parts has an expected long-term growth rate of 12.3%. Over the past six months, shares of the company have risen 41.4%.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have risen 17%.

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