Cooper Tire & Rubber Announces Its 2Q16 Results, Dividend

Cooper Tire & Rubber (CTB) rose by 3.5% to close at $34.15 per share during the first week of August 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.5%, 13.2%, and -9.2%, respectively, as of August 5.

CTB is trading 8.6% above its 20-day moving average, 9.6% above its 50-day moving average, and 4.5% below its 200-day moving average.

The iShares Dow Jones US Consumer Goods Sector Index ETF (IYK) invests 0.07% of its holdings in CTB. The ETF tracks a market cap–weighted index of stocks in the US consumer goods sector. The YTD price movement of IYK was 8.5% on August 5.

The Vanguard Small-Cap Value ETF (VBR) invests 0.11% of its holdings in CTB. The ETF aims to track the CRSP US Small-Cap Value Index. The index selects from a list of stocks in the 85%–99% market cap range based on five value factors.

The market caps of CTB’s competitors are as follows:

• Boeing (BA) — $82.4 billion
• The Goodyear Tire & Rubber Company (GT) — $7.5 billion

CTB reported 2Q16 net sales of $740.3 million, a fall of 1.5% compared to its net sales of $751.8 million in 2Q15. Sales of its Americas Tire and International Tire segments fell by 2.7% and 1.0%, respectively, in 2Q16 compared to 2Q15. The company’s gross profit margin and operating profit rose by 14.3% and 10.6%, respectively, in 2Q16 compared to the prior year’s period.

CTB’s net income and EPS (earnings per share) rose to $70.7 million and $1.27, respectively, in 2Q16, compared to $59.6 million and $1.03, respectively, in 2Q15.

CTB’s cash and cash equivalents and inventories rose by 1.0% and 3.7%, respectively, in 2Q16 compared to 2Q15. Its current ratio rose to 3.1x, and its debt-to-equity ratio fell to 1.4x in 2Q16 compared to its current and debt-to-equity ratios of 2.9x and 1.7x, respectively, in 2Q15.

Cooper Tire & Rubber Company has declared a quarterly dividend of $0.11 per share on its common stock. The dividend will be paid on September 30, 2016, to shareholders of record at the close of business on September 2, 2016.

The company has made the following projections:

• non-cash pension settlement charge in the range of $14 million–$18 million in fiscal 3Q16 related to optional lump-sum payments of benefits offered to certain former employees
• effective tax rate in the range of 33%–35% for fiscal 2016
• capital expenditure in the range of $210 million–$240 million, excluding the impact of acquisitions, for fiscal 2016

 For an ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.