A month has gone by since the last earnings report for Bruker (BRKR Quick QuoteBRKR - Free Report) . Shares have added about 0.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Bruker due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Bruker Q1 Earnings Surpass Estimates, Margins Rise

Bruker delivered adjusted earnings per share of 44 cents in the first quarter of 2021, skyrocketing 214.3% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate by 37.5%.

The adjustments include expenses related to purchased intangible amortization, acquisition-related costs and restructuring costs among others.

GAAP earnings per share for the quarter was 37 cents a share, reflecting a huge 428.6% surge from the year-earlier figure.

Revenues in Detail

Bruker registered revenues of $554.7 million in the first quarter, up 30.8% year over year. However, the figure surpassed the Zacks Consensus Estimate by 8.9%.

Excluding the positive impact of 0.8% from acquisitions and another 6.2% from favorable changes in foreign currency rates, the company saw organic revenue growth of 23.8%.

Robust performances by all the reporting segments across geographies significantly drove the first-quarter top line.

Geographically, the United States witnessed an 8.8% rise in revenues in the reported quarter. The Other category’s revenues climbed 8.6%. Further, Europe revenues rose 51.8% year over year whereas revenues in the Asia Pacific inched up 31.6%.

Segments in Detail

Bruker reports results under three segments, namely BSI Life Science (comprising BioSpin and CALID), BSI Nano and BEST.

In the first quarter, BioSpin Group revenues improved 31.8% from the year-ago quarter to $159.4 million on the back of restored customer demand and instrument deliveries. Also, the business was boosted by strong BioSpin systems revenues, including customer adoption of the company’s two GHz-class systems and growth of aftermarket and software revenues.

CALID revenues were up 36.9% year over year to $192.4 million, primarily resulting from strong demand for the life science mass spectrometry and molecular spectroscopy businesses. Continued robust growth in the timsTOF 4D proteomics business along with recovery in the broader mass spectrometry business also drove the top line.

Total BSI Life Science revenues were $351.8 million, up 34.6% year over year.

Revenues in the Nano group climbed 28.6% to $154.4 million on continued robust demand for microelectronics and semiconductor metrology along with significant rebound in the segment’s industrial research and academic businesses. Also, solid order growth in the Fluorescence Microscopy business pushed up the segmental revenues.

Organic revenues and revenues at constant exchange rate or CER at the BSI segment (including BSI Life Science and BSI Nano Segments) increased 25.6% and 32.7% year over year, respectively.

In the first quarter, the company’s BEST segment revenues were $52.4 million, up13.4% year over year, resulting from recovery in demand for superconductors by MRI companies.

Organically, BEST segment revenues improved 7.1% year over year, net of intercompany eliminations. At CER, the segment revenues climbed 14.1%.

Margin Trend

In the quarter under review, Bruker’s gross profit rose 44.9% to $278.7 million. Gross margin expanded 489 basis points (bps) to 50.2%.

Meanwhile, selling, general & administrative expenses rose 8.7% to $131.8 million. Research and development expenses went up 12.9% year over year to $54.8 million. Adjusted operating expenses of $186.6 million increased 9.9% year over year.

Adjusted operating profit totaled $92.1 million, reflecting a 307.5% surge from the prior-year quarter. Further, adjusted operating margin in the first quarter expanded a huge 1127 bps to 16.6%.

Financial Position

Bruker exited the first quarter of 2021 with cash and cash equivalents, and short-term investments of $746.8 million compared with $731.8 million at the end of 2020. Long-term debt (including current portion) at the end of the first quarter of 2021 was $824.2 million compared with $844.5 million at the end of 2020.

Net cash flow from operating activities at the end of the first quarter was $98 million compared with $35 million a year ago.

2021 Guidance

Bruker, boosted by its strong performances, raised its 2021 outlook.

For 2021, Bruker expects revenue growth of approximately 14-16%, up from the previously issued guidance of 11-13%. Organic revenue growth is projected within 11-13%, up from the earlier guided range of 7-9%.

The company expects full-year adjusted earnings per share in the band of $1.82-$1.87, indicating an uptick of 35-39% from the 2020 reported figure (up from the previous expectation of $1.72-$1.77, which called for a 27-31% increase from the year-ago reported figure). The Zacks Consensus Estimate for the same is pegged at $1.77.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Bruker has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Bruker has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.