The Cooper Companies, Inc.

The Cooper Companies, Inc. (COO - Analyst Report), which manufactures contact lenses, beat fourth quarter estimates by 12.07% as it recorded record revenue in fiscal 2008. The company has surprised on estimates 3 out of the last 4 quarters by an average of 4.38%. COO is trading at 9.3x forward earnings.

Company Description

The Cooper Companies manufactures specialty healthcare products. The company has two divisions: CooperVision and CooperSurgical.

CooperVision manufactures soft contact lenses and specializes in lenses for astigmatism, presbyopia and ocular dryness. The company produces monthly, 2-week and daily disposable contact lenses.

CooperSurgical manufactures medical devices, diagnostic products and surgical instruments mainly used by gynecologists and obstetricians.

Record Revenue in Fiscal 2008

On Dec 9, The Cooper Companies reported fourth-quarter 2008 earnings which beat Wall Street estimates by 12.07%. Earnings per share were 65 cents compared to a loss of 54 cents in the fourth quarter of 2007. Analysts expected 58 cents per share. Non-GAAP full-year 2008 earnings per share were $2.26 vs. $2.12 in fiscal 2007.

Fourth quarter revenue jumped 6% to $268.8 million. Both divisions saw gains, as CooperVision grew 6% to $224.1 million and CooperSurgical saw revenue increase 7% to $44.7 million.

Full-year 2008 revenues climbed 12% to a record $1.063 billion. Again, both divisions saw revenue growth, as CooperVision gained 12% and CooperSurgical grew 9%.

2009 Guidance

In early December, the company believed the contract lens market would remain soft in early 2009 but projected it would improve later in the year. CooperVision was expected to launch two new products in the first quarter 2009, Biofinity (r) toric and Proclear (r) 1 Day in Japan. A third launch, of Avaira (tm) toric, was expected to be out in the marketplace by the end of fiscal 2009.

In the meantime, the company is actively cutting costs and focusing on gaining market share.

For fiscal 2009, COO is projecting revenue in the range of $1.03 billion to $1.1 billion which would be a change between negative 3% to positive 3% over 2008.

Consensus Estimates Holding

Consensus estimates for both 2009 and 2010 have been holding fairly steady over the last 60 days. 2009 estimates have been holding at $2.15. For 2010, estimates are up 2 cents to $2.45 from $2.43 in the last 60 days.

COO is scheduled to report first-quarter 2009 earnings on Mar 12.

Value Fundamentals

The Cooper Companies is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 9.3 and a price-to-book of 0.72. The company has a solid average 5-year return on equity (ROE) of 11.04%.

Read the full analyst report on COO