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Cooper Companies (COO) Beats on Q1 Earnings and Revenues

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.

Quarter Details

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.

Outlook

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).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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