Cooper Tire & Rubber Co.
) reported solid third quarter results early last month, which led
to an increase in all earnings estimates for this year over the
past 30 days. This Zacks #1 Rank (Strong Buy) replacement tire
maker also reached its 52-week high of $24.98 on November 29.
Solid Earnings Growth in Q3
On November 2, Cooper Tire & Rubber posted a more than four
fold increase in earnings for its third quarter to $74.1 million or
$1.17 per share, compared to last year's $17.3 million or $0.27.
EPS trounced the Zacks Consensus Estimate by nearly 35%.
Revenues in the quarter increased 4.5% year over year to $1.10
billion, driven by higher sales in North America.
Cost of goods sold fell 6.6% to $897.5 million in the quarter. As a
result, both gross profits and operating profits more than doubled
to $198.2 million and $129.6 million, respectively, from the prior
year levels. Furthermore, management expects raw material prices to
remain flat in the fourth quarter compared to the third quarter of
Earnings Momentum Climbing
The Zacks Consensus Estimate for 2012 is at $3.09 per share,
gaining 20.7% in the past month as all 6 estimates were revised
higher. For 2013, the Zacks Consensus Estimate rose 8.1% to $3.22
in the same timeframe, based on upward revisions from 5 of 7
The estimates for 2012 and 2013 suggest year-over-year growth of
157.8% and 4.1%, respectively.
A Look at the Chart
Cooper Tire's stock price has doubled year-to-date, as its strong
product portfolio, favorable demand environment and improved
manufacturing efficiencies helped lower costs.
The chart shows the formation of a new trend in the first quarter
of 2012 when the 50-day moving average crosses above the 200-day
moving average . Furthermore, the rising 200-day moving average
undoubtedly signals optimism.
Volume is fairly strong, averaging roughly 1,137K daily. The 1-year
return for the stock is 90.1%, which is substantially higher than
the S&P 500's 21.2%.
Founded in 1914 and headquartered in Findlay, Ohio, Cooper Tire
& Rubber Co. manufactures tires and related products for
passenger vehicles and light trucks. The $1.6 billion company has 9
manufacturing facilities and 38 distribution centers located in 11
countries across the globe. It is the ninth largest tire company in
the world and fourth largest in North America in terms of sales.
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