The Cooper Companies Inc.COO reported adjusted earnings per share (EPS) of $1.83 in the first quarter of 2016, which handily beat the Zacks Consensus Estimate of $1.58. Adjusted EPS also increased 4.6% on a year-over-year basis.
Revenues increased a modest 1% year over year to $449.6 million and beat the Zacks Consensus of $442 million. The uptick in the year-over-year performance can be primarily attributed to strength at the CooperSurgical (CSI) segment.
CooperVision (CVI) revenues dropped 1% (up 4% at constant currency) on a year-over-year basis to $364.3 million, owing to lower adoption of Multifocal (down 5%) and Non-single-use sphere (down 6%) lenses. Adoption of Single-use sphere lenses increased by 8%, while that of Toric lenses fell 1% on a year-over-year basis.
Geographically, revenues in the Americas fell 5%, in Europe; Middle East and Africa (EMEA) fell 2% while the same in Asia Pacific increased 7% year over year.
CSI revenues increased 12% on a year-over-year basis to $85.3 million. Revenues from the office and surgical business climbed 7% year over year, while the fertility business witnessed growth of 24%.
Adjusted gross margin contracted 300 basis points (bps) from the year-ago quarter to 61% owing to lower margin at the CVI business. The downside was primarily caused by unfavorable product mix and foreign exchange headwinds.
Adjusted operating margin contracted 100 bps on a year-over-year basis to 22% primarily because of a reduction in the gross margin base.
Cooper Companies updated its projection for fiscal 2016. Adjusted EPS is projected in the band of $8.00-$8.30, as compared with the previous guidance of $7.60-$7.90.
The company forecasts total revenues in the range of $1.87-$1.90 billion, as compared with the earlier range of $1.83-$1.87 billion.
CVI revenues are estimated in the band of $1.51-$1.54 billion, similar to the previously projected band. However, CSI revenues are now expected at around $355-$365 million, compared with the previous $325-$335 million range.
Zacks Rank & Other Stocks to Consider
Currently, Cooper Companies carries a Zacks Rank #2 (Buy). Other favorably ranked stocks in the medical sector are Abiomed ABMD , CryoLife CRY and Luminex LMNX . All the stocks sport a Zacks Rank #1 (Strong Buy).