CooperVision, Inc., a segment of the global medical device
The Cooper Companies Inc.
), revealed that effective Oct 31 its rigid gas permeable contact
lens and solutions business in Japan, Aime is no longer a part of
the company due to its divestment to Nippon Contact Lens Inc. at
an undisclosed price following an agreement reached in May this
The news triggered positive investors' sentiment as the stock
price elevated 1.5% to $127.60 after the market closed yesterday
since the announcement on Nov 7.
COO's decision to divest the Lens business was driven by its
falling revenues and lower than average margins as well as its
aim to focus on soft contact lens business. Cooper Companies
acquired the Aime business in 2010 as part of an acquisition that
allowed the company to sell its Biofinity lens in Japan.
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Due to the acquisition, COO will record a charge of 25 to 30
cents per share to its fiscal fourth quarter 2013 earnings.
However, Cooper Companies expects the deal to be neutral to
earnings post divestiture. Aime generated revenues of $25.3
million in fiscal 2013.
Last month, CooperVision unveiled a new contact lens brand,
Biofinity XR, as an extension to its popular Biofinity (comfilcon
A) silicone hydrogel technology. The lens is suitable for greater
number of monthly replacement lens patients, including those who
are suffering from significant hyperopia (far sightedness) and
myopia (short sightedness).
Biofinity lens mitigates the problem of limited breathability of
older contact lens. It is equipped with Aquaform Technology that
results in more oxygen reaching the eyes, enabling clearer and
whiter vision with less irritation. These lenses also retain
moisture for smoothness and comfort, and maintain softness and
flexibility for more comfortable wear.
CooperVision is a leading global manufacturer of monthly,
two-week and single-use contact lenses. Its products are designed
to mitigate vision challenges such as astigmatism, presbyopia and
Cooper Companies reported earnings and revenues for the fiscal
third quarter ended Jul 31, 2013, both of which surpassed the
Zacks Consensus Estimates. The company's adjusted earnings of
$1.74 per share exceeded the year-ago level of $1.45 by 20% as
well as the Zacks Consensus Estimate by 3 cents. On a reported
basis, earnings per share improved 31.6% to $1.79 from $1.36 a
Revenues in the quarter grew 8.9% to $412.0 million, ahead of the
Zacks Consensus Estimate of $410 million. Thanks to the solid
CooperVision (CVI) and CooperSurgical (CSI) sales during the
quarter and their continued market share gains.
For fiscal 2013, COO upgraded the lower range of its revenue
guidance to the range of $1,586-$1,601 million compared with the
earlier guidance of $1,575-$1,605 million, comprising CVI
revenues between $1,271 and $1,281 million (previously $1,260 to
$1,280 million) and CSI revenues between $315 and $320 million
(previously $315 to $325 million).
Cooper Companies also upgraded its reported and adjusted earnings
per share guidance for the fiscal year. The company now expects
reported earnings in the band of $6.57 to $6.62 compared with the
earlier range of $6.42 to $6.52 and adjusted earnings in the
range of $6.23 to $6.28 compared with the earlier range of $6.15
Currently, COO carries a Zacks Rank #4 (Sell). The company will
release its fourth quarter and full year 2013 financial results
on Dec 5, 2013.
Other medical supplies stocks that are also worth a look include
Align Technology Inc.
Merit Medical Systems, Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).