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Cooper-Standard (CPS) Q2 Earnings Lag Estimates, Down Y/Y

Zacks Equity Research

Cooper-Standard Holdings Inc. CPS reported adjusted earnings of 31 cents per share in second-quarter 2019, which missed the Zacks Consensus Estimate of $1.11 per share. Further, the bottom line was lower than the year-ago quarter’s figure of $2.74 per share. The quarterly results were affected by challenging market conditions.

In the quarter under review, sales of $765 million missed the Zacks Consensus Estimate of $820 million. The year-ago quarter’s figure amounted to $928 million. The year-over-year decline in sales was primarily caused by unfavorable volume and mix, foreign exchange as well as the sale of the company’s Anti-Vibration Systems (AVS).

During the reported quarter, adjusted net income was $5.4 million, down from the prior-year quarter’s figure of $50.3 million. Adjusted EBITDA declined to $58.1 million from $107.9 million recorded in the second quarter of 2018.

Segmental Performance

Sales in the North America segment were $404.9 million, down from the year-ago quarter’s figure of $477.6 million. During the quarter, adjusted EBITDA in the segment came in at $54.9 million, down from $82.7 million recorded in the prior-year quarter.

Sales in the Europe segment were $216.2 million, down from $279.1 million in second-quarter 2018. The segment’s adjusted EBITDA was $6.1 million compared with $16.3 million in the prior-year quarter.

The Asia Pacific segment reported sales of $118.6 million in the reported quarter, down from $148 million in second-quarter 2018. The segment incurred adjusted EBITDA loss of $1.6 million, versus gain of $11.3 million in second-quarter 2018.

The company’s South America segment generated sales worth $25.1 million during the quarter under review, up from $23.5 million in second-quarter 2018. The segment reported loss of $1.3 million compared with prior-year quarter’s loss of $2.3 million.

Cooper-Standard Holdings Inc. Price, Consensus and EPS Surprise

 

Cooper-Standard Holdings Inc. Price, Consensus and EPS Surprise

Cooper-Standard Holdings Inc. price-consensus-eps-surprise-chart | Cooper-Standard Holdings Inc. Quote

 

Financials

Cooper-Standard had $310.8 million of cash and cash equivalents as of Jun 30, 2019, compared with $264.9 million as of Dec 31, 2018. The company had long-term debt of $737.8 million as of Jun 30 compared with $729.8 million recorded on Dec 31, 2018.

2019 Outlook

For 2019, the company anticipates sales in the range of $3-$3.2 billion, down from the previous view of $3.2-$3.4 billion. It expects adjusted EBITDA in the band of $270-$300 million, down from the earlier guidance of $300-$340 million. Further, the company expects capital expenditure in the range of $175-$185 million.

Zacks Rank & Stocks to Consider

Currently, Cooper-Standard has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the auto space worth considering are Copart, Inc CPRT, CarMax, Inc KMX and Gentex Corporation GNTX. While Copart sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 30.1%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 14%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 15.5%.

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