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Cooper (COO) to Report Q1 Earnings: Is a Surprise in Store?

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The Cooper Companies Inc. (COO - Free Report) is set to report first-quarter fiscal 2017 results after the market closes on Mar 2.
 
Cooper Companies has an impressive track of beating estimates in the trailing four quarters. In the last reported quarter, it recorded a positive earnings surprise of 1.79%, bringing the four-quarter average to a positive 6.32%. Also, in the past three months, Cooper Companies returned almost 18.65%, outperforming the Zacks categorized Medical/Dental-Supplies sub-industry’s gain of roughly 9.08%. Let’s see how things are shaping up prior to this announcement.



 

Factors at Play

For fiscal first-quarter 2017, adjusted earnings per share are projected in the band of $1.78–$1.88. CooperVision Segment (CVI) revenues are expected between $383 million and $393 million, while CSI revenues are anticipated between $111 million and $115 million. Net revenues are forecast in the range of $494–$508 million. Results from the EMEA and Asia-Pacific regions are expected to be strong.

We believe the expanding presence of the company in the fertility segment will drive top-line growth. The company’s focus on genetic testing will also continue to drive growth in our view. Cooper Companies expects complementary IVF products that were acquired through the takeover of Research Instruments. A small fertility micro-needle company will add to growth in the to-be reported quarter. However, volatile foreign exchange is likely to hurt the company’s results in the quarter to be reported.

However, overall activities of Cooper Companies during the first quarter were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the quarter fell 28 cents to $1.86 per share in the last 90 days.

Earnings Whispers

However, our proven model does not conclusively show that Cooper Companies is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Cooper Companies currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.86. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Cooper Companies, Inc. (The) Price and EPS Surprise

Zacks Rank: Cooper Companies currently carries a Zacks Rank #2 (Buy) which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
 
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat:

Masimo Corporation (MASI - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis, Inc. (EXEL - Free Report) has an Earnings ESP of +200.00% and a Zacks Rank #2.

Zynerba Pharmaceuticals, Inc. has an Earnings ESP of +2.74% and a Zacks Rank #2.

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