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Cooper Tire (CTB) Hit by Low Volumes & High Material Costs

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On May 4, we issued an updated research report on Cooper Tire & Rubber Company CTB.

On Apr 30, the company reported earnings of 16 cents per share for the first quarter of 2018, which missed the Zacks Consensus Estimate of 60 cents. The bottom line was also lower than the prior-year quarter’s figure of 57 cents per share. Results were impacted by high manufacturing costs and weak volumes. The company reported net sales of $601 million, missing the Zacks Consensus Estimate of $643 million. Moreover, the year-ago quarter’s net sales were $643 million as well.

Low demand in the U.S. market and elevated prices for materials are negatively impacting the company’s business. The decline in first-quarter 2018 operating profit is due to the lower volume and higher manufacturing expenses. The company’s strategy to adjust production in line with demand and inventory led to higher costs.

The Zacks Consensus Estimate for the current quarter and the current-year earnings are showing a declining trend over the past 30 days. In the past year, Cooper Tire underperformed the industry it belongs to. The company’s share price lost 37.4% over this period compared with 30% decrease recorded by the industry.


However, the company is continuing its plans to expand product portfolio, with a focus to satisfy the market demand in all regions. It is also expanding presence in Asia and Latin America through acquisitions and the opening of new sales offices.

Cooper Tire currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the auto space are Visteon Corporation VC, Wabash National Corporation WNC and Fiat Chrysler Automobiles N.V. FCAU. Visteon and Wabash National currently carry a Zacks Rank #2 (Buy) while Fiat Chrysler sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Visteon has an expected long-term growth rate of 15%. In the last three months, shares of the company have gained 4%.

Wabash National has an expected long-term growth rate of 21.5%. Shares of the company have risen 3% in the last six months.

Fiat Chrysler has an expected long-term growth rate of 23.7%. In the last six months, shares of the company have gained 31%.

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Fiat Chrysler Automobiles N.V. (FCAU) : Free Stock Analysis Report
Visteon Corporation (VC) : Free Stock Analysis Report
Wabash National Corporation (WNC) : Free Stock Analysis Report
Cooper Tire & Rubber Company (CTB) : Free Stock Analysis Report
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