Cooper Tire & Rubber (CTB) Q3 Earnings Beat, Revenues Miss

Cooper Tire & Rubber Co. (NYSE:CTB) posted earnings of $1.18 per share in the third quarter of 2017, beating the Zacks Consensus Estimate of 85 cents. Also, earnings came in higher than the year-ago quarter figure of 90 cents.

Net income came in at $62 million compared with $49 million in the third quarter of 2016.

Cooper Tire registered net sales of $734 million, missing the Zacks Consensus Estimate of $788 million as well the year-ago revenues of $751 million.

Operating profit was $101 million in the third quarter of 2017, up 29.6% from the year-ago quarter.

Segment Details

Americas Tire Operations registered a 7% decrease in net sales to $625 million. Operating profit in this segment rose 15.7% to $117 million, while operating margin increased from 15.1% to 18.8%.

International Tire Operations registered a 44.8% rise in revenues to $163 million. Operating profit came in at $1 million, decreasing from $3 million in the year-ago quarter. Operating margin declined to 0.4% from 2.9% in the year-ago quarter.

Financial Position

Cooper Tire had cash and cash equivalents of $258 million as of Sep 30, 2017, down from $450 million as of Sep 30, 2016. Capital expenditures increased to $53 million in the third quarter of 2017 from $41 million in the year-ago quarter.

Share Repurchases

In Feb 2017, Cooper Tire increased the share repurchase program by $300 million and extended it till Dec 2019. During the third quarter of 2017, the company spent $31.6 million on repurchasing 902,494 shares at a price of $35.05 per share. Since Aug 2014, Cooper Tire has bought back a total of 14.1 million shares at an average price of $34.36 per share.

Outlook

Cooper Tire expects operating margin for full-year 2017 to be at the high end of the previously announced mid-term target of 8-10%. For 2017, capital expenditures are still expected between $190 and $210 million. The effective tax rate for the year is expected to be 30-33%.

Cooper Tire currently has a Zacks Rank #4 (Sell).

Some better-ranked companies in the auto space are Daimler AG (OTC:DDAIF) , BorgWarner Inc. (NYSE:BWA) and Autoliv, Inc. (NYSE:ALV) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Daimler has an expected long-term growth rate of 2.8%.

BorgWarner has an expected long-term growth rate of 8.9%.

Autoliv has an expected long-term growth rate of 8.7%.

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