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Cooper’s Results ‘Disappointing’

Cooper Tire’s fourth quarter 2004 results disappointed analysts, according to a Deutsche Bank report. For them, the “major disappointment” was volume, which decline 6 per cent year-on-year. Cooper also registered earnings per share of $0.04, less than half analysts’ estimate. As a result the bank cut its 2005 earnings per share estimate from $1.45 to $0.75. They also cut their 2006 estimate from $2.45 to $1.25. In spite of these criticisms, the analysts also noted that the result were not necessarily reflective of “normal” profitability. “We find it encouraging that CTB’s order fill rates are in the low 80 per cent range, which implies that demand is outstripping supply.”

17th February 2005/by Tyrepress Editors

BorgWarner: Continued Growth Expected in 2005

BorgWarner Inc has reported 2004 earnings of $3.86 per share on sales of $3.5 billion (£1.9 million). In the fourth quarter of 2004 the company also recorded sales of $889 million (£477 million) up 11 per cent compared with the same time in 2003. BorgWarner reports that this equates to an operating income margin of 10 per cent.

8th February 2005/by Tyrepress Editors

Goodyear Shares Slip 10 per cent

Shares in Goodyear Tire & Rubber have dropped 10 per cent after a Deutsche Bank analyst gave the company a “sell” rating. The analyst suggested that the share’s value had increased to the point that it could no longer be sustained. Although many news sources have reported the news, one business website, Motley Fool, ran an article suggesting that this was just “another reason why investors ought not consider analyst recommendations.” The story goes on to highlight how Deutsche bank has applied the range of ratings to Goodyear and not once “correctly called the stock’s performance.”

7th February 2005/by Tyrepress Editors

Goodyear Shares Lowered to Sell Rating

Deutsche Bank analysts have lowered Goodyear’s share advice rating from hold to sell. The announcement comes in spite of the fact that Goodyear’s shares have performed strongly since mid-October in response to positive news from the industry, stabilisation of market share losses, and increased optimism about a turnaround. However, now that the company’s share price has reached 21 times the analysts’ 2005 estimate, the bank believes the price growth will slow down. According to the analysts, “the bull case is more than fully reflected.”

4th February 2005/by Tyrepress Editors

Continental confident on 2005 outlook

Continental’s president and CEO (North America), Martin de Louw, is “optimistic on 2005’s outlook” reports Deutsche bank. Analysts predict that earnings will benefit from a partial payback from the Mayfield plant closure and the conclusion of restructuring charges attached to it.

The consolidation of Phoenix and a positive impact from selling price increase/raw material price increase of maybe 50 million euros is also expected to benefit the company. “Overall while 2004 was a good year for Tires Co, 2005 could be even better,” say analysts.

14th January 2005/by Tyrepress Editors

Cooper Analysis Positive

According to Deutsche Bank, Cooper Tire’s (CTB) management “sounded pretty optimistic on CTB’s growth prospects for 2005,” at a recent analyst conference.

Company representatives remain positive about industry pricing, reports the German news source, with Cooper rolling out new price increases of up to four per cent in March. New contracts that have recently been secured should also encourage 2.5 per cent growth, say analysts.

14th January 2005/by Tyrepress Editors

US Tyre Shipments Beat Expectations

Financial analysts are predicting that the US tyre market has performed better than expected in the month of December, increasing 9.5 per cent year-over-year. The news follows a six per cent increase in November and an 8 per cent decline in October. The market watchers from Deutsche Bank estimate that US tyre manufacturers are likely to have experienced a 2.5 per cent increase in replacement volume. In addition the analysts report that volumes this quarter are also better than expected. As a result Deutsche Bank predicts that Cooper and Goodyear will experience a positive modification in their share prices of $0.10 and $0.07 respectively.

11th January 2005/by Tyrepress Editors

Bridgestone’s Shares Fall: Update

Deutsche Bank analysts have cast doubt on the negative predictions published in the Japanese business press. According to the market observers, reports that Bridgestone’s recurring profit is set to fall 17 per cent year-on-year may not be as accurate as they seem. Although the article cites high raw material costs and yen appreciation, it fails to take into account tyre price increases, which started being implemented in Japan last year. The analysts explained that in the last few year Bridgestone has recorded strong earnings, defying the Nikkei’s projections. As a result the bank says it will not change its earning projections or rating, adding that if the share price dips below 2000 yen this would represent “an attractive investment opportunity.”

5th January 2005/by Tyrepress Editors

BorgWarner Publishes Tender Offer to Beru Shareholders

BorgWarner Germany, an indirect subsidiary of BorgWarner, Wilmington, USA, has officially published its takeover offer for Beru. As previously announced, the offered purchase price amounts to 67.50 euros per share. The acceptance deadline is 24 January 2005.

According to Deutsche Bank analysts, the most interesting point about the offer it’s the fact that BorgWarner does plan to opt for a “squeeze out” or a domination agreement “for the time being.” However, there is clause stating, if Beru’s AGM agrees to a domination agreement or a squeeze out within one year after publication of the offer and the price is higher than the current takeover price then BorgWarner is bound to pay the difference to those shareholders who have tendered their shares.

The closing of the share purchase agreement and the exercise of the share purchase option agreement remain subject to regulatory approval of the relevant authorities. More details are expected in the next few days.

9th December 2004/by Tyrepress Editors

US Tyre Shipments Increase

Deutsche Bank analysts are reporting that US tyre replacement shipments have “picked up” in November, increasing 6 per cent year over year. This was the first positive year over year comparision since June. The analysts also suggest that Cooper Tire may have slightly under-performed in the market. In spite of this the analysts also report that Cooper is currently proceeding above its –10 per cent volume assumption for the quarter.

9th December 2004/by Tyrepress Editors

European Car Sales on the Increase

Northern European car sales are set to increase by up to 9 per cent, market analysts from Deutsche Bank are predicting. According to the bank sales could turn out strongly rising roughly 9 per cent. The reason behind the growth is said to be down to a number of factors including an 11 per cent increase in the German market, two additional selling days in the month and a number of significant launches.

8th December 2004/by Tyrepress Editors

Toyo Prepares Small-Lot Production in US

Toyo Tire has released details of its US production plant, several weeks after laying the foundation stone for the Cartersville, Georgia, production facility. According to Deutsche Bank, the Japanese tyre manuafacturer is going to install a flexible, automated production system which is well suited for small-lot production. This is said to produce better quality products than conventional methods. The company calls the system its Advanced Tyre Operation Module or ATOM.

Toyo Tire first announced this production system two years ago and developed the technology with support from Toyota Motor, running pilot production schemes in Japan. The new factory, Toyo’s first US tyre production facility, will cost $392 million and will create up to 900 jobs. The factory will have an annual capacity of two million passenger car and light truck tyres after construction is completed in 2006.

12th November 2004/by Tyrepress Editors

Michelin Confident About its US Price Increases

Recent market reports have stated that the latest price increases in the US passenger replacement market weren’t sticking. However Michelin is said to be confident that the price increases it instigated (key to offset raw material price increases) were sticking. Michelin passed two price increases in H1of three and five per cent.

According to Deutsche Bank the company also confirmed what it had already stated last summer; that the market may see a third set of price increases this year.

21st September 2004/by Tyrepress Editors

September Sales off to a Slow Start

September’s US auto sales appear to be off to a slow start according to a recent Deutsche Bank survey. The analysts’ results suggest that the light vehicle SAAR is claiming around 16.1 million units (16.5 total) a figure that compares poorly with last September’s 16.7 million.

Hurricanes are again thought to be the reason for the dwindling figures and analysts believe that these indications of a weak start are likely to weigh heavily on the sector. Ford’s sales are down 10 per cent and its market share around 20 per cent. It is also estimated that GM ‘s sales are down three per cent, implying a 28 per cent market share. Whereas Chrysler’s sales are thought to be flat, implying an 11.7 per cent market share.

20th September 2004/by Tyrepress Editors

The Effects of Reduced Demand

As a result of the decline in the US tyre market, Deutsche Bank analysts are revising their estimates for tyre manufacturers Goodyear and Cooper. The analysts say they are adjusting their share price estimates for Cooper from $1.85 down to $1.70. Goodyear’s estimates are to be adjusted by a similar amount, from 50 down to 40 cents. According to the analysts, the 1.6 per cent slip in the market during August is a consequence of high fuel prices, which in turn reduces the amount of disposable income available to consumers.

10th September 2004/by Tyrepress Editors