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A month has gone by since the last earnings report for Cooper Tire (CTB). Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cooper Tire due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cooper Tire Delivers Dismal Q4 Results
Cooper Tire reported fourth-quarter 2020 adjusted earnings of 75 cents per share, which lagged the Zacks Consensus Estimate of 92 cents. The underperformance was attributed to weaker-than expected revenues and income from the American Tire Operations segment. The bottom line also declined from earnings per share of $1.02 recorded in the prior-year quarter. The company’s net sales slipped 3% year over year to $728.3 million for fourth-quarter 2020, mainly due to lower unit volumes. The reported figure also missed the Zacks Consensus Estimate of $748 million.
Net sales in Americas Tire Operations tailed off 3.9% year over year to $629 million on lower unit volume and unfavorable currency translations. The reported figure also missed the Zacks Consensus Estimate of $656 million. Operating profit in the segment declined 14% from the year-ago quarter to $72 million and fell short of the consensus mark of $77 million. Operating margin was 11.4% compared with the prior-year quarter’s 12.9%.
Revenues in International Tire Operations grew 14% from a year ago to $136 million due to higher unit volume and favorable forex impact. The unit registered operating profit of $3 million against operating loss of $6 million posted in the year-ago quarter. Operating margin was 2.4% versus negative 5% reported in the prior-year quarter.
Cooper Tire had cash and cash equivalents of $625.7 million as of Dec 31, 2020 compared with $391.3 million recorded in the comparable year-ago period. Capital expenditure for fourth-quarter 2020 increased to $55 million from the year-ago level of $47 million. As of Dec 31, 2020, long-term debt and finance leases amounted to $314.3 million, up from $309 million recorded at 2019-end.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 45.64% due to these changes.
Currently, Cooper Tire has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Cooper Tire has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Cooper Tire & Rubber Company (CTB) : Free Stock Analysis Report
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