Back to top

Image: Bigstock

Bruker's Q2 Results Disappoint, Product Launches Continue

Read MoreHide Full Article

On Aug 12, we issued an updated research report on Billerica, MA-based Bruker Corporation (BRKR - Free Report) − a global manufacturer of high-end analytical instruments utilized within the academic & government, pharma/biotech, clinical diagnostic and industrial markets. The company currently carries a Zacks Rank #3 (Hold).

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. Despite significant revenue decline organically, a reasonably better performance by BioSpin group, optics and semiconductor metrology businesses as along with a margin recovery witnessed in the Bruker's Nano-surfaces business, encourage us.

Currently, Bruker is in the process of assimilating the Jordan Valley Semiconductor within its Nano segment. Through this acquisition, Bruker expects to capitalize on nano-metrology requirements of smaller feature sizes and three dimensional structures, which are increasingly growing in demand in the semiconductor metrology market.

On healthier bookings and backlogs, already in the second quarter, this acquisition contributed 3% growth to the company’s revenues. Management anticipates the semiconductor metrology tools to contribute considerably to Bruker’s top line through the rest of 2016 as well. We believe the recent initiatives adopted by Bruker in this segment will enable it to return to a positive organic growth trajectory going ahead.

Bruker is also progressing well with its existing MALDI Biotyper menu. During the reported quarter, the company launched Rapiflex MALDI-TOFTOF for detailed protein characterization in life science research and biopharmaceutical laboratories. Further, we are also looking forward to the company’s MALDI PharmaPulse label-free ultra-high throughput screening platform for direct discovery on Rapiflex mass-spec system, which should fetch good orders by pharma companies in the second half of 2016.

On the flip side, unfavorable currency translation continues to be a major hindrance for the stock. Additionally widespread macroeconomic uncertainties prevailing in countries like the U.S., Russia and certain European nations in which Bruker operates might impede its revenue growth significantly, in case of any further economic downturn. Competitive headwinds also continue to pose concerns.

Key Picks in the Sector

Some of the top-ranked medical stocks are GW Pharmaceuticals plc , LeMaitre NuVasive, Inc. and Quidel Corp. (QDEL - Free Report) . All the three 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 >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


QuidelOrtho Corporation (QDEL) - free report >>

Bruker Corporation (BRKR) - free report >>

Published in