Cooper Tire & Rubber Earnings: Increased Costs Weigh on Bottom Line

Cooper Tire & Rubber Company produces and markets passenger, light truck, medium truck, motorsport and motorcycle tires which are sold nationally and internationally in the replacement tire market. Ford Motor Earnings Cheat Sheet: Profits Accelerate at Double-Digit Pace>>

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Cooper Tire & Rubber Earnings Cheat Sheet for the First Quarter

Results: Net income for the rubber and plastics company remained steady at $11.6 million (19 cents/diluted share) from the same quarter a year ago.

Revenue: Remained constant at $754.4 million.

Actual vs. Wall St. Expectations: CTB fell short of the mean analyst estimate of 22 cents/share. Estimates ranged from 10 cents per share to 39 cents per share.

Quoting Management: Roy Armes, Chief Executive Officer, commented, “Despite elevated raw material costs, we continued making improvements to our underlying operations and delivered solid operating profits during the quarter. In addition to the work we have done to improve costs, we have implemented price increases in a variety of ways around the globe to address these pressures.”

“We still intend to produce 10 percent more units in 2011 than we did in 2010 to help meet the continued strong demand for our products. We expect raw material costs to remain at elevated levels after the first quarter, but persistent volatility can make it difficult to accurately predict movements in raw material prices. We have forecasted that our raw material index is likely to be sequentially higher, by between 10 percent and 15 percent, during the second quarter. We believe increases to the raw material index should begin to decelerate during the third quarter.”

Key Stats: Over the last five quarters, revenue has increased 17.6% on average year over year. The biggest increase came in the first quarter of the last fiscal year, when revenue rose 32% from the year earlier quarter.

Competitors to Watch: Bridgestone Corp. (BRDC), AutoZone (NYSE:AZO), CarMax (NYSE:KMX), General Motors (NYSE:GM), Ford (NYSE:F), Toyota (NYSE:TM) and Goodyear Tire & Rubber Co. (NYSE:GT).

Today’s Performance: Shares of CTB are trading at $26.56 as of April 26, 2011 at 9:33 AM ET, down .86% from the previous close.


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