Cooper Tire & Rubber Co.’s CTB shares gained 2.6% to close at $38.7Array on Feb 23, 20Array6, after the company reported fourth-quarter 20Array5 earnings and increased its share repurchase authorization. Cooper Tire announced an increase in its share repurchase authorization to $200 million. This will replace the prior authorization, announced in Feb 20Array5, under which $74 million was outstanding as of Feb Array9, 20Array6. The new authorization is valid up to Dec 3Array, 20Array7.
In Feb 20Array5, Cooper Tire authorized the repurchase of shares worth up to $200 million, of which $Array26 million was utilized up to Feb Array9, 20Array6. Further, in Feb 20Array5, the company completed an accelerated share repurchase (“ASR”) program worth $200 million with J.P. Morgan Chase Bank, which was announced previously in Aug 20Array4. The company repurchased 6.4 million shares under the ASR, thus significantly reducing its outstanding shares.
Since Aug 20Array4, when the company began repurchasing shares, it has bought back 9.6 million shares at an average price of $34.00 per share. These share buybacks will have a positive impact on the company’s future earnings per share.
Earnings Review
Cooper Tire’s adjusted earnings increased to $Array.04 per share in the fourth quarter of 20Array5 from 45 cents in the prior-year quarter. Also, the figure comfortably surpassed the Zacks Consensus Estimate of 73 cents. Net income amounted to $59.2 million compared with $82.3 million in the fourth quarter of 20Array4.
Cooper Tire’s revenues declined 5.4% year over year to $776 million in the reported quarter. The decline in the top line was due to the company’s sale of interest in Cooper Chengshan (Shandong) Tire Company Ltd. (“CCT”), excluding which revenues improved 3%. Further, revenues outpaced the Zacks Consensus Estimate of $764 million. Revenues in the reported quarter benefited from an increase in unit volume in both the Americas and International segments, partially offset by the adverse impact of price and mix, and currency changes.
Zacks Rank
At present, Cooper Tire sports a Zacks Rank #Array (Strong Buy).
Other favorably ranked automobile stocks include O'Reilly Automotive Inc. ORLY, Fuji Heavy Industries Ltd. FUJHY and The Goodyear Tire & Rubber Company GT. While Fuji Heavy Industries currently sports a Zacks Rank #Array, both O'Reilly and Goodyear hold a Zacks Rank #2 (Buy).
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