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Analysts like Cooper following 2Q results

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Despite posting a net loss on reduced sales for the second quarter, Cooper Tire & Rubber Co. received very positive comments from analysts.

"About the only disappointing news in the second quarter was that Cooper Tire's 20% volume decline in North America trailed the 13% decline in industry shipments," said Saul Ludwig, managing director for KeyBanc Capital Markets. KeyBanc had estimated that Cooper's volume would decline by 18%

Ludwig said he was optimistic for the following reasons:

* Cooper performed better than the market in June;

* Cooper was able to lower some selling prices on value tires "to better compete with low-cost imports";

* Raw material costs were down 30% in the 2Q;

* Following a 2Q write-off of $23 million in unabsorbed overhead, Cooper will ramp up its plant operating rates to more than 80% as the Albany, Ga., plant closes.

"We believe the Cooper train has pulled out of the station running at a high speed, yet there is still fuel in the tank to accelerate performance next year," said Ludwig, who's stock rating remains "Buy."

Tony Cristello, senior vice president of equity research for BB&T Capital Markets, also reiterates "Buy" for Cooper stock.

"With lower raw material input costs and further manufacturing efficiencies likely to drive profits in the near term, supplemented by an eventual recovery in replacement tire demand and savings from cessation of Albany production in 2010, we believe that shares of Cooper Tire continue to offer compelling value at current levels," he said.

Cooper reported a net loss of $13 million on net sales of $631.7 million for the second quarter ended June 30, 2009. That compares to a net loss of $22.2 million on sales of $772.9 million for the same period last year.

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