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Cooper Companies (COO) Q2 Earnings & Revenues Beat Estimates

The Cooper Companies, Inc.COO posted second-quarter fiscal 2018 adjusted earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 1.1%. Earnings also increased 14.4% on a year-over-year basis.

The California-based specialty medical device company reported revenues worth $631.3 million, which surpassed the Zacks Consensus Estimate by 0.8%. Revenues improved 20.8% from the prior-year quarter and 5% on a pro forma basis (defined as constant exchange rate and including acquisitions in both periods).

Meanwhile, Cooper's shares have declined 0.8% against the industry 's rise of 5.7% in the past six months.

The stock currently carries a Zacks Rank #3 (Hold).

The Cooper Companies, Inc. Price, Consensus and EPS Surprise

The Cooper Companies, Inc. Price, Consensus and EPS Surprise | The Cooper Companies, Inc. Quote

Segment Details

Cooper reports revenues in two major segments - CooperVision (CVI) and CooperSurgical (CSI) .

CVI

This segment garnered revenues worth $467.5 million, up 14% on a year-over-year basis and 6% at cc. Per management, overall CVI sales have been driven by strong performance by the silicone hydrogel portfolio of Clariti and MyDay.

Toric (32% of CVI) revenues raked in $150.8 million, up 8% at cc, while Multifocal (10%) generated revenues worth $49.1 million, up 7% at cc.

Single-use sphere (27%) posted revenues worth $124.4 million, up 19% from the prior-year quarter. Non single-use sphere (31%) revenues came in at $143.2 million, up 10% from a year ago.

Geographically, the segment saw a strong quarter. U.S. revenues rose 7% to $183.6 million on a year-over-year basis and 6% at cc. Management expects the U.S. growth momentum to be strong in the second half on fiscal 2018, with growth expected in upper single-digits.

Revenues rose 20% on a year-over-year basis in both EMEA and Asia Pacific.

CSI

This segment posted revenues of $163.8 million, up 44% from a year ago and 3% at cc. Per management, growth was led by strength in PARAGARD and the fertility solutions product offerings.

Sub-segment Office and Surgical products (60% of CSI) accounted for $97.9 million, up a whopping 86% year over year. Fertility (40%) posted sales worth $65.9 million, up 8% year over year.

Margin Analysis

As a percentage of revenues, adjusted gross margin at the CSI segment was 71% in the reported quarter, up 900 basis points (bps) compared with the prior-year quarter.

As a percentage of revenues, adjusted gross margin at the CVI segment was 68% in the reported quarter, higher than 67% of revenues in the year-ago quarter.

In the second quarter, gross profit as a whole for Cooper Companies, totaled $431.3 million, up 25% from the year-ago quarter. Adjusted gross margin was 68.3%, which expanded 230 bps.

Operating income in the quarter totaled $180.2 million, up 28.8% from the prior-year figure. Adjusted operating margin was 28.5%, up 170 bps.

Guidance Updated

Cooper updated its revenue guidance for fiscal 2018.

The company now expects fiscal 2018 revenues within $2,515-$2,550 million compared with the previous range of $2,510-$2,560 million. Notably, the Zacks Consensus Estimate for the same is pegged at $2.53 billion, which lies within the projected range.

Revenues at the CVI segment are now estimated in the band of $1,870-$1,890 million, compared with $1,870-$1,890 million stated previously. However, CSI revenue range has been kept intact at $645-$660 million.

Fiscal 2018 adjusted earnings per share are anticipated between $11.70 and $11.90. The Zacks Consensus Estimate for earnings is pinned at $11.80, within the projected range.

In Conclusion

Cooper wrapped up fiscal second quarter on a solid note. Strong performance by CooperVision buoys optimism. Geographically as well, the company put up a solid show. The acquisition of PARAGARD drove CooperSurgical revenues. Management is optimistic about the recently-completed acquisition of LifeGlobal which is expected to enhance Cooper's fertility business. Further, the continued improvement in gross and operating margin is promising.

On the flip side, Cooper's long-term debt has increased significantly, which raises concern. Moreover, continued acquisitions pose integration risks. Stiff competition in the niche space adds to the woes.

Key Picks

A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical ISRG , Chemed Corporation CHE and Baxter International Inc. BAX . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.

Chemed posted first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.

Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.

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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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