Cooper Tire (CTB) Q3 Earnings & Sales Top Estimates, Up Y/Y

Cooper Tire & Rubber Company CTB reported third-quarter 2020 adjusted earnings per share of $2.42, which surpassed the Zacks Consensus Estimate of 67 cents. Better-than expected contribution from American and International Tire Operations segments led to the outperformance. The bottom line also surged from earnings per share of 58 cents recorded in the prior-year quarter.

The company’s net sales grew 8.6% year over year to $765 million for third-quarter 2020, mainly due to higher pricing and unit volumes, as well as favorable foreign currency impact. The reported figure also topped the Zacks Consensus Estimate of $673 million.

Gross profit amounted to $237.3 million, up a whopping 108% year over year. Additionally, operating profit came in at $171.5 million, way higher than the year-ago level of $52.7 million.

Cooper Tire Rubber Company Price, Consensus and EPS Surprise

Cooper Tire Rubber Company price-consensus-eps-surprise-chart | Cooper Tire Rubber Company Quote

Key Takeaways

Net sales in Americas Tire Operations rose 9.6% year over year to $660 million on higher unit volume and favorable price mix. The reported figure also topped the Zacks Consensus Estimate of $556 million. Operating profit in the segment jumped 158.7% from the year-ago quarter to $176 million. Operating margin was 26.6% compared with the prior-year quarter’s 11.3%.

Revenues in International Tire Operations grew 7.5% from a year ago to $142 million due to higher unit volume and favorable price mix. The top line also outpaced the Zacks Consensus Estimate of $120 million. The unit registered operating profit of $9 million against operating loss of $5 million posted in the year-ago quarter. Operating margin was 6.2% versus negative 3.7% reported in the prior-year quarter.

Cooper Tire had cash and cash equivalents of $495.6 million as of Sep 30, 2020 compared with $137 million recorded in the comparable year-ago period. Capital expenditure declined to $24 million from the year-ago level of $50 million. As of Sep 30, 2020, long-term debt and finance leases amounted to $319.4 million, up from $120.6 million on Sep 30, 2019.

Amid low inventory levels, the company expects total unit volumes for second-half 2020 to be lower than the corresponding period of 2019. Nonetheless, it anticipates operating profit margin within 10-14% for the second half of 2020.

Cooper Tire — which shares space with Goodyear Tire GT, Bridgestone Corp BRDCY and Michelin MGDDY — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Goodyear Tire Rubber Company (GT) : Free Stock Analysis Report
 
Cooper Tire Rubber Company (CTB) : Free Stock Analysis Report
 
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Michelin (MGDDY) : Free Stock Analysis Report
 
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