Cooper Tire & Rubber Company
) reported nearly a threefold increase in earnings to $1.15 per
share in the fourth quarter of 2012 from 51 cents in the same
quarter of 2011. With this, the company topped the Zacks
Consensus Estimate by as much as 30 cents per share. Net earnings
more than doubled to $73 million from $32 million in the fourth
quarter of 2011.
Earnings in the quarter were positively affected by lower raw
material costs of $101 million, manufacturing efficiencies of $9
million, volume increases of $5 million and lower product
liability costs of $2 million. These were partially offset by $25
million in unfavorable price and mix, and $20 million in
increased selling, general and administrative expenses as the
company continued to invest in expanding distribution networks
and promoting its brands.
Revenues edged up 2% to $1.1 billion during the quarter. The
increase was attributable to higher volumes in the truck-bus
radial tire segment, new product launches and, to some extent,
volume growth generated from the acquisition of tire
manufacturing assets in Serbia. Operating profit more than
doubled to $124.2 million (11.7% of sales) from $59.7 million
(5.7%) a year ago.
The North American Tire Operations recorded a 5% rise in revenues
to $811.0 million. The increase in sales was attributable to
increased unit sales (2%) and higher price and mix. The company's
total light vehicle tire shipments in the U.S. were nearly flat
during the quarter on a year-over-year basis. Rubber
Manufacturers Association (RMA) member shipments declined 3% and
total industry shipments (that includes an estimate for non-RMA
members) increased 2% during the quarter.
Operating profits in the segment nearly tripled to $103.2 million
(12.7% of net sales) from $34.9 million (4.5%) in the fourth
quarter of 2011. This increase was attributable to a $51 million
decrease in raw material costs, $19 million in improved price and
mix, $10 million due to manufacturing efficiencies and $3 million
due to higher unit volumes These were partially offset by $11
million of higher selling, general and administrative expense and
$6 million of "other" costs related to pension and incentive
The International Tire Operations posted a 9% decline in revenues
to $341.6 million. The decline was caused by lower pricing
and mix of $62 million that more than offset the impact of higher
unit volumes of $25 million and favorable currency translation of
Operating profits upped 10.3% to $32.2 million (9.4% of net
sales) compared with $28.9 million (7.7%) a year ago. The
improvement was attributable to lower raw material costs of $67
million and higher unit volumes of $2 million, offset partially
by unfavorable price and mix of $63 million and higher selling,
general and administrative expenses of $2 million.
COOPER TIRE (CTB): Free Stock Analysis Report
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For full year 2012, Cooper Tire's profit per share declined 13.2%
to $3.49 from $4.02 in 2011. However, it was higher than the
Zacks Consensus Estimate of $3.09. Net sales escalated 7.5% to
$4.2 billion during the year.
Cooper Tire had cash and cash equivalents of $351.8 million as of
De 31, 2012, up from $233.7 million in the corresponding
quarter-end a year-ago. Long-term debt stood at $338.5 million as
of the above date, translating into a long-term
debt-to-capitalization ratio of 27.1%. This compared with $350.7
million or 33.4% as of Dec 31, 2011.
Cooper Tire & Rubber Company, a Zacks Rank #4 (Sell) stock,
believes stabilizing raw material costs, flexible manufacturing
operations, profitable investments, and competitive labor
agreements will help the company improve results despite
headwinds facing the industry.
Cooper Tire's competitor,
Goodyear Tire & Rubber Company
) reported a profit of $97 million or 39 cents per share in the
fourth quarter of 2012 that significantly rose from $6 million or
3 cents in the same quarter of 2011 (all excluding special
items). With this, the company has beaten the Zacks Consensus
Estimate of 21 cents per share. Including special items, the tire
maker had a breakeven 2012-fourth quarter, which compared with a
profit of $18 million or 7 cents per share in the 2011 quarter.
While we like to avoid Goodyear, stocks that are worth looking
for in the same industry include
). They carry a Zacks Rank #1 (Strong Buy).