CLEVELAND (Sept. 21, 2009)—Analyst Saul Ludwig has raised his estimates for Cooper Tire & Rubber Co.'s third quarter earnings to 75 cents per share from 46 cents due to higher North American volumes and the effectiveness of manufacturing cost initiatives.
Ludwig, of Keybanc Capital Markets Inc., wrote in his report that he estimates Cooper's year-end earnings per share to hit $1.40 instead of $1.05, and he raised his 2010 estimate to $1.60 per share from $1.35. Cooper's rating remains at buy.
In his key investment points, Ludwig said he had spoken with more than 20 U.S. tire dealers in the past two weeks who provided very positive comments on Cooper's products, delivery and services.
Additionally, Findlay, Ohio-based Cooper's manufacturing costs are falling because of savings from plant closures, benefits from a new labor contract, automation, government incentives and lean initiatives, according to the report.
Ludwig also predicted that third quarter raw materials costs will be 35 percent lower than at the same period in 2008, and 25 percent lower during the fourth quarter.