On Nov 28, we retained our Neutral recommendation on
The Cooper Companies Inc.
). We are encouraged about COO's earnings and revenue beats in
the fiscal 2013-third quarter as well as continued growth in the
contact lens market. However, near term issues emanating from a
weak economy, particularly in Europe, raise concerns.
ALIGN TECH INC (ALGN): Free Stock Analysis
COOPER COS (COO): Free Stock Analysis Report
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On Sep 5, Cooper Companies reported earnings and revenues for the
fiscal third quarter ended Jul 31, 2013, both of which surpassed
the Zacks Consensus Estimate. 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.
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.
COO upgraded its revenues and earnings guidance for fiscal 2013.
The company expects revenues in the range of $1,586
million-$1,601 million compared with the earlier guidance of
$1,575 million-$1,605 million, comprising CVI revenues between
$1,271 million and $1,281 million (previously $1,260 million to
$1,280 million) and CSI revenues between $315 million and $320
million (previously $315 million to $325 million).
The company also 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 to $6.25.
Following the release of third quarter results, the Zacks
Consensus Estimate for 2013 earnings rose 0.6% to $6.26 per
share. The Zacks Consensus Estimate for 2014 earnings also went
up 1.7% to $7.01 per share.
Cooper commanded almost one-third market share in rapidly growing
specialty lenses, multifocal lenses and torics. The company
continued to garner market share by growing at two to three times
the market growth rate.
Further, the outlook for the contact lens industry is favorable.
A fall in dropout rate of contact lens wearers and further market
penetration, especially in developing nations, is expected with
continuous improvisation in the technology.
However, the global markets, particularly European nations,
continue to be negatively affected by uncertainty. In such a
situation, contact lens, being a discretionary purchase for the
most part, is often deferred by cash-strapped consumers.
Moreover, COO faces formidable competition in each of its major
product lines. Competition comes from globally well established
contact lens manufacturers such as
Johnson & Johnson
Other Stocks to Look For
Other stocks in the medical/dental supplies industry that are
currently worth a look include
Align Technology Inc.
). Align Technology carries a Zacks Rank #1 (Strong Buy).