Cooper Tire Beats on Earnings, Down Y/Y - Analyst Blog


Shares price of Cooper Tire & Rubber Co. ( CTB ) increased 0.9% to $24.57 on March 17, after the company reported better than expected result. Earnings in the fourth quarter of 2013 fell significantly to 31 cents from $1.15 per share in the prior-year quarter. However, the earnings surpassed the Zacks Consensus Estimate of 21 cents. Net income amounted to $19.6 million as against $72.9 million in the fourth quarter of 2012.

Revenues of Cooper Tire declined 19% year over year to $861.0 million in the quarter, beating the Zacks Consensus Estimate of $836 million.

Operating profit declined to $47 million (5.5% of sales) from $124.2 million (11.7%) a year ago. Results in the quarter include costs of $9 million related to the terminated merger agreement with Apollo Tyres Ltd.

Fiscal 2013 Performance

Cooper Tire's earnings decreased to $1.73 per share for full-year 2013 from $3.49 in 2012. Revenues for full-year 2013 dropped 18.1% to $3.4 billion from $4.2 billion in 2012.

Segment Details

The North American Tire Operations recorded a 23% decline in revenues to $628 million. Lower unit volumes and unfavorable price and mix led to the decline in sales. Operating profit in the segment declined to $35 million or 5.5% of sales from $103.2 million or 12.7% in the fourth quarter of 2012.

The International Tire Operations posted a 17% decline in revenues to $283 million. The decrease can be attributed to lower unit volumes and unfavorable pricing and mix, partially offset by favorable currency effects. Operating profit fell to $22 million or 7.7% of sales from $32 million or 9.4% of sales a year ago.

Financial Position

Cooper Tire had cash and cash equivalents of $397.7 million as of Dec 31, 2013, up from $351.8 million in the corresponding year-ago quarter end. Long-term debt stood at $338.8 million as of Dec 31, 2013, translating into a long-term debt-to-capitalization ratio of 22.6% against $338.5 million and 27.1% as of Dec 31, 2012.


Cooper Tire expects raw material costs to drop 3% sequentially in the first quarter of 2014. For 2014, capital expenditures are expected between $165 million and $175 million. With the termination of the merger agreement, the company expects recovery in unit volumes.

Cooper Tire & Rubber Company currently carries a Zacks Rank #3 (Hold).

Other stocks that are performing well in the industry are Gentherm Incorporated ( THRM ), STRATTEC Security Corporation ( STRT ) and Gentex Corp. ( GNTX ). Gentherm and STRATTEC carry a Zacks Rank #1 (Strong Buy) while Gentex Corp. has a Zacks Rank #2 (Buy).

COOPER TIRE (CTB): Free Stock Analysis Report

GENTEX CORP (GNTX): Free Stock Analysis Report

STRATTEC SEC CP (STRT): Free Stock Analysis Report

GENTHERM INC (THRM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CTB , GNTX , STRT , THRM

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