Cooper Tire & Rubber Co (CTB) Q4 Earnings Preview: A Deflating Experience By: Rich Bieglmeier March 13, 2014 02:23 PM Stocks: CTB, -------------------------------------------------------------------------------- Cooper Tire & Rubber Co (NYSE:CTB) will announce fourth quarter and full-year 2013 financial results before market open Friday, March 14, 2014. Management will discuss the financial results on a conference call beginning at 11 a.m. EDT that same day. Wall Street anticipates that the Rubber & Plastics company will earn $0.26 per share for the quarter, which is $0.89 less than last years profit of $1.15 per share. iStock expects CTB to miss Wall Streets consensus number. The iEstimate is $0.24, a bearish surprise of -$0.02. Along with EPS deflating like 100s of pothole damaged tires, Coopers revenue is expected to fall by 27.10% to $774.32 million from $1.06 billion the previous year. [Related -Stocks End Lower Amid Fed Uncertainty; First Solar, Inc. (FSLR) Plunges] Cooper Tire & Rubber Company manufactures, and markets replacement tires worldwide. It operates in two segments, North American Tire Operations and International Tire Operations. The company offers passenger car and light truck tires, as well as distributes tires for racing, medium trucks, and motorcycles to independent tire dealers, wholesale distributors, regional and national retail tire chains, and other automotive product retail chains. With the stock market getting cracked, CTB history EPS-driven price performance might make those looking for an idea to short or buy put options against; Cooper Tire might be your play. Although the tire company has topped or met Wall Streets consensus view 10 of the last 13 quarterly checkups, the stock price has gotten hammered like a Whack-a-Mole more often than not. [Related -Hewlett-Packard Company (HPQ): Bulls Snap Up Weekly Calls On Hewlett-Packard] In the last 13 quarters, CTB shares rolled over and played dead 10 times. Falling from -1.18% to -23.29% with an average loss of -11.13%. Thats pretty bad. Making matters worse, when investors cheered Coopers earnings, the stock gained just 0.83%, 2.68% and 9.84% for the trifecta of green responses. Based on our cursory review of the companys most recent financial statements, Q4 could be another bumpy road. Last quarter, sales fell by 24%, which means analysts are projecting even faster deceleration for the fourth quarter. Unfortunately, for shareholders, cost and expenses arent dropping as quickly or at all. Cost of products sold (COPS) declined too, but only at -18.1%, which translates to COPS rising as a percent of revenue – not good. Additionally, Selling, general and administrative actually went higher, ugh. The combination is deadly for margins and the bottom line. Moving onto the balance sheet, we find year-over-year (YoY) inventory levels declined just 4.34%. This makes no sense in the face of sales forecasted to drop 27% YoY. It could mean a lot of unsold tires and future price markdowns, again harmful to the bottom line. Anecdotally, those living in the polar vortex, snow ravished parts of the county are more than familiar with a road menace, freaking potholes everywhere. Its like driving on the moon. Aside from asphalt companies, tire companies could be experiencing a bump in sales thanks to swiss cheese roads. Overall: Cooper Tire & Rubber Cos (NYSE:CTB) iEstimate suggest another bearish surprise, and CTBs earnings price-sensitivity history says a lot of air could come out of the stock price.
Posted on: Thu, 13 Mar 2014 19:54:10 +0000
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