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What: Shares of Cooper Tire & Rubber Co (NYSE:CTB) were peeling out today, gaining as much as 11%, and finishing up 7% on a strong fourth-quarter earnings report.
So what: The tire maker said sales declined 19%, to $861 million, well ahead of estimates at $774.3 million, while earnings of $0.31 beat the experts' view of $0.26. Cooper delivered its second-highest full-year operating profit in the company's 100-year history, and CEO Roy Armes said the company's performance was "a testament to the resilience of our business model." Profits and sales were down year over year due to a labor standoff at its joint venture in China, an unfavorable sales mix, and higher manufacturing costs; but, with strong beats on top and bottom lines, Cooper rose to the occasion.
Now what: For the current year, management did not provide guidance, but it said it expects first quarter raw material costs to decline 3% and then rise over the long term. Armes also said, "The challenges of 2013 are largely behind us," and that Cooper should see unit volumes recover and grow at a rate equal to or greater than the industry. Analysts are expecting flat revenue, but the company should see some sales growth on higher volumes, which could send shares higher.
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