Cooper Tire & Rubber Co. Earnings: Beats Forecasts

Cooper Tire & Rubber Co. (NYSE:CTB) reported net income above Wall Street’s expectations for the fourth quarter. Cooper Tire & Rubber produces and markets passenger, light truck, medium truck, motorsport, and motorcycle tires that are sold nationally and internationally in the replacement tire market.

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Cooper Tire & Rubber Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the rubber and plastics company rose to $209 million ($3.33 per share) vs. $40.2 million (64 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year-earlier quarter.

Revenue: Rose 13.7% to $1.05 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cooper Tire & Rubber Co. beat the mean analyst estimate of 39 cents per share. It beat the average revenue estimate of $1.02 billion.

Quoting Management: Roy Armes, Chief Executive Officer, commented, “During the quarter, we successfully navigated several challenges, resulting in a quarter with more than $1 billion in sales and sequential margin expansion from the third quarter. “Our strengthened product portfolio is continuing to perform very well as we achieved better than market growth in multiple product lines. Focusing on delivering products that meet ever-changing consumer needs should help to balance our exposure to broadline tires and economic conditions. We continue to believe that pent-up demand for broadline tires exists, although it is difficult to predict exactly when that demand will manifest.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 17.4%, with the biggest boost coming in the first quarter when revenue rose 20.1% from the year earlier quarter.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 1.3 percentage points to 10.9% from the year-earlier quarter. In that span, margins have contracted an average of 3.4 percentage points per quarter on a year-over-year basis.

After two quarters of falling short, the company beat estimates last quarter. In the third quarter, it missed the mark by 5 cents, and in the second quarter, it came in under estimates by 28 cents.

Last quarter’s profit increase breaks a two-quarter streak of year-over-year profit decreases. In the third quarter, net income fell 61.3% while the figure dropped in the second quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 34 cents per share, down from 41 cents ninety days ago. At $1.24 per share, the average estimate for the fiscal year has fallen from $1.27 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com