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Bruker (BRKR) Posts In-Line Q2 Earnings, Misses Sales
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Bruker Corporation (BRKR - Free Report) reported adjusted earnings per share (EPS) of 20 cents in the second quarter of 2016, up from the year-ago quarter’s figure by a penny. Adjusted EPS was in line with the Zacks Consensus Estimate.
Per management, lower share count contributed to this bottom-line improvement, although the company observed lower operating profit.
Excluding one-time adjustments, Bruker reported net income of $14.5 million or 9 cents per share, exhibiting a year-over-year decline of 33.8% or 30.8% in the second quarter.
Bruker reported revenues of $371.7 million in the second quarter, down 6.1% year over year. The top line also missed the Zacks Consensus Estimate of $408 million. While acquisition boosted Bruker's second-quarter revenues by 3.1%, foreign exchange rates had no impact. Excluding these, Bruker's organic revenues declined 9.2% on a year-over-year basis.
Per management, academic funding delays in Europe, weakening industrial markets globally and lower Maldi Biotyper sales in China as well as in the U.S can be attributed to the deterioration in the company’s second quarter revenue growth.
Geographically, the company witnessed double-digit revenue decline in Europe and Japan, whereas North America experienced double-digit revenue growth.
Adjusted gross margin in the reported quarter expanded 250 basis points (bps) to 47.6%, owing to the company’s Jordan Valley acquisition, NMR revenue growth, price increases, operational improvements and favorable product mix. However these positive effects were marginally neutralized by the lower Nano and CALID volume observed in the second quarter.
Selling, general & administrative expenses increased 2.4% to $100.9 million, while research and development expenses fell 1.9% to $36.8 million. Adjusted operating income dropped 6.8% year over year to $40 million. However, the adjusted operating margin remained flat at 10.8% in the quarter.
Financial Position
Bruker exited the reported quarter with cash and cash equivalents and short-term investments of $420.4 million compared with $420.5 million at the end of first quarter of 2016. At the end of the second quarter, net cash flow from operating activities was $18.1 million, compared with $1.5 million of net cash outflow recorded in the year-ago quarter.
Adjusted free cash flow was $8.9 million in the quarter, compared with free cash outflow worth $9.2 in the prior-year quarter. This improvement was primarily driven by increased working capital.
During the reported quarter, Bruker repurchased 1.2 million shares for $34.5 million. At the end of the second quarter, the company was left with approximately $42.4 million of the remaining authorization to buy back shares, as part of the initial $225 million share back program.
Guidance
For full-year 2016, Bruker updated its guidance. Management currently expects its reported revenue in 2016 to be approximately flat compared to the prior year, including an organic decline of 2% and acquisition related growth of 2%. The company also expects to its adjusted operating margin to increase by approximately 75–100 bps year over year. Earlier, the company projected organic revenue growth of approximately 3% as well as adjusted operating margin expansion of 100 bps, year over year. The current Zacks Consensus Estimate for 2016 revenues stands at $1.66 billion.
However, on the bottom-line front, Bruker maintains adjusted EPS projection in the range of 97 cents–$1.02 for 2016. The current Zacks Consensus Estimate for 2016 EPS stands at $1.01, within the company’s guidance.
Our Take
Bruker ended second quarter of 2016 on a disappointing note. While the company’s earnings came in line with the Zacks Consensus Estimate, revenues missed the mark. Although year over year growth was observed in the bottom line figure of the reported quarter, but that was merely fuelled by lower share count and not by any strong operating results on the company’s part. Further, revenues suffered a high-single-digit decline which buoys further pessimism.
On a brighter note, the company exhibited solid cash balance position on the back of improved free cash flow compared to the prior-year period. Further, a comparatively better performance delivered by Bruker’s BioSpin group, optics and semiconductor metrology businesses as well as a margin recovery observed in the Bruker Nano-surfaces business, encourages us. Evidently the cost-reduction action previously adopted by the company in its Nano-surfaces business played its role suitably. However, a reduction observed in management’s revenue guidance for the company’s 2016 results, again deflates this optimism.
Zacks Rank & Key Picks
Bruker currently has a Zacks Rank #3 (Hold). Some better-ranked medical stocks worth a look are IDEXX Laboratories, Inc. (IDXX - Free Report) , Masimo Corporation (MASI - Free Report) and Natus Medical Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Bruker (BRKR) Posts In-Line Q2 Earnings, Misses Sales
Bruker Corporation (BRKR - Free Report) reported adjusted earnings per share (EPS) of 20 cents in the second quarter of 2016, up from the year-ago quarter’s figure by a penny. Adjusted EPS was in line with the Zacks Consensus Estimate.
Per management, lower share count contributed to this bottom-line improvement, although the company observed lower operating profit.
Excluding one-time adjustments, Bruker reported net income of $14.5 million or 9 cents per share, exhibiting a year-over-year decline of 33.8% or 30.8% in the second quarter.
Revenues in Detail
Bruker reported revenues of $371.7 million in the second quarter, down 6.1% year over year. The top line also missed the Zacks Consensus Estimate of $408 million. While acquisition boosted Bruker's second-quarter revenues by 3.1%, foreign exchange rates had no impact. Excluding these, Bruker's organic revenues declined 9.2% on a year-over-year basis.
Per management, academic funding delays in Europe, weakening industrial markets globally and lower Maldi Biotyper sales in China as well as in the U.S can be attributed to the deterioration in the company’s second quarter revenue growth.
Geographically, the company witnessed double-digit revenue decline in Europe and Japan, whereas North America experienced double-digit revenue growth.
BRUKER CORP Price, Consensus and EPS Surprise
BRUKER CORP Price, Consensus and EPS Surprise | BRUKER CORP Quote
Margin Trends
Adjusted gross margin in the reported quarter expanded 250 basis points (bps) to 47.6%, owing to the company’s Jordan Valley acquisition, NMR revenue growth, price increases, operational improvements and favorable product mix. However these positive effects were marginally neutralized by the lower Nano and CALID volume observed in the second quarter.
Selling, general & administrative expenses increased 2.4% to $100.9 million, while research and development expenses fell 1.9% to $36.8 million. Adjusted operating income dropped 6.8% year over year to $40 million. However, the adjusted operating margin remained flat at 10.8% in the quarter.
Financial Position
Bruker exited the reported quarter with cash and cash equivalents and short-term investments of $420.4 million compared with $420.5 million at the end of first quarter of 2016. At the end of the second quarter, net cash flow from operating activities was $18.1 million, compared with $1.5 million of net cash outflow recorded in the year-ago quarter.
Adjusted free cash flow was $8.9 million in the quarter, compared with free cash outflow worth $9.2 in the prior-year quarter. This improvement was primarily driven by increased working capital.
During the reported quarter, Bruker repurchased 1.2 million shares for $34.5 million. At the end of the second quarter, the company was left with approximately $42.4 million of the remaining authorization to buy back shares, as part of the initial $225 million share back program.
Guidance
For full-year 2016, Bruker updated its guidance. Management currently expects its reported revenue in 2016 to be approximately flat compared to the prior year, including an organic decline of 2% and acquisition related growth of 2%. The company also expects to its adjusted operating margin to increase by approximately 75–100 bps year over year. Earlier, the company projected organic revenue growth of approximately 3% as well as adjusted operating margin expansion of 100 bps, year over year. The current Zacks Consensus Estimate for 2016 revenues stands at $1.66 billion.
However, on the bottom-line front, Bruker maintains adjusted EPS projection in the range of 97 cents–$1.02 for 2016. The current Zacks Consensus Estimate for 2016 EPS stands at $1.01, within the company’s guidance.
Our Take
Bruker ended second quarter of 2016 on a disappointing note. While the company’s earnings came in line with the Zacks Consensus Estimate, revenues missed the mark. Although year over year growth was observed in the bottom line figure of the reported quarter, but that was merely fuelled by lower share count and not by any strong operating results on the company’s part. Further, revenues suffered a high-single-digit decline which buoys further pessimism.
On a brighter note, the company exhibited solid cash balance position on the back of improved free cash flow compared to the prior-year period. Further, a comparatively better performance delivered by Bruker’s BioSpin group, optics and semiconductor metrology businesses as well as a margin recovery observed in the Bruker Nano-surfaces business, encourages us. Evidently the cost-reduction action previously adopted by the company in its Nano-surfaces business played its role suitably. However, a reduction observed in management’s revenue guidance for the company’s 2016 results, again deflates this optimism.
Zacks Rank & Key Picks
Bruker currently has a Zacks Rank #3 (Hold). Some better-ranked medical stocks worth a look are IDEXX Laboratories, Inc. (IDXX - Free Report) , Masimo Corporation (MASI - Free Report) and Natus Medical Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>