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The Cooper Companies (COO) Beats Earnings Estimates in Q1
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The Cooper Companies Inc. (COO - Free Report) reported adjusted earnings of $1.93 in first-quarter fiscal 2017, surpassing the Zacks Consensus Estimate by 7 cents and improving 5.5% on a year-over-year basis. We believe that the upside was driven by robust revenue growth.
Revenues increased 11% year over year (up 8% at constant exchange rate or CER, including acquisitions in both periods) to $499.1 million, missing the Zacks Consensus Estimate of $503 million. The stock carries a Zacks Rank #2 (Buy).
Shares of this Pleasanton, CA-based medical device company have had an impressive run on the bourse over the past one year. Over the last three months, The Cooper Companies gained 21.4%, comparing favorably with the Zacks categorized Medical/Dental-Supplies sub-industry's decline of 2.3% and the S&P 500’s return of 11.2%.
However, post the earnings release, shares witnessed a nominal increase of 0.3% to close at $201.14.
Revenue Segments
The Cooper Companies has two business segments – CooperVision (CVI) and CooperSurgical (CSI).
CooperVision Segment: CVI revenues increased 7% to $389.3 million (up 9% at CER) on a year-over-year basis.
Coming to the major growth catalysts within the CVI segment, robust performance by Toric (31% of CVI revenues), Multifocal (10.9% of CVI revenues) and Single-use sphere lenses (25.6% of CVI revenues) propelled solid growth.
In fact, multi focal revenues rose 5% to $42.4 million, while Toric revenues increased 12% to $120.7 million on a year-over-year basis. Coming to the sphere lenses, single-use sphere lenses sales climbed 10% to $99.5 million, while sales of non single-use sphere lenses inched up by 1% to $126.7 million year over year.
Geographically, CVI revenues increased 8% in the Americas, while in the Asia Pacific, revenues surged 20% year over year.
CooperSurgical Segment: CSI revenues jumped 29% (up 3% at CER) to $109.8 million on a year-over-year basis.
Coming to the CSI segment, the fertility category witnessed an 83% surge in sales in the reported quarter on a year-over-year basis, totaling $56.8 million. However, the office and surgical products category at the CSI segment declined 2% to $53.0 million.
Margin Details
Adjusted gross margin in the reported quarter was 63% of revenues, as compared with 61% registered in the year-ago quarter. The gross margin improvement was fueled by favorable product mix within the CooperVision segment, courtesy of the company’s flagship Biofinity product line.
Adjusted operating margin, as a percentage of revenues, was 23% in the first quarter, compared with 22% a year ago. The major reason behind the upside is the acquisition of Wallace, a division of Smiths Group.
Guidance
For fiscal 2017, total revenue is expected in the band of $2,090–$2,130 million.
Notably, revenues at the CVI segment are estimated between $1,620 million and $1,650 million, while CSI revenues are projected in the range of $470–$480 million.
Meanwhile, adjusted earnings are anticipated in the band of $9.10–$9.30 per share, compared to the previously provided $9.00–$9.30 range.
Our Take
CooperVision continued to gain market traction, courtesy of innovative products like Biofinity and daily silicone hydrogel lenses, while CooperSurgical witnessed stellar growth in its fertility sub-segment.
Taking the stellar performance of the stock into consideration, we expect The Cooper Companies to scale higher in the coming quarters. In this regard, a positive long-term growth of 11.8% holds promise.
Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 184.6%.
Avinger projects sales growth of 30.7% for the current year. Additionally, the company posted a positive earnings surprise of 27% in the last quarter.
Fluidigm Corporation has a long-term expected earnings growth rate of 25%. The stock added 1.23% over the last three months.
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The Cooper Companies (COO) Beats Earnings Estimates in Q1
The Cooper Companies Inc. (COO - Free Report) reported adjusted earnings of $1.93 in first-quarter fiscal 2017, surpassing the Zacks Consensus Estimate by 7 cents and improving 5.5% on a year-over-year basis. We believe that the upside was driven by robust revenue growth.
Revenues increased 11% year over year (up 8% at constant exchange rate or CER, including acquisitions in both periods) to $499.1 million, missing the Zacks Consensus Estimate of $503 million. The stock carries a Zacks Rank #2 (Buy).
Share Price Trend
Shares of this Pleasanton, CA-based medical device company have had an impressive run on the bourse over the past one year. Over the last three months, The Cooper Companies gained 21.4%, comparing favorably with the Zacks categorized Medical/Dental-Supplies sub-industry's decline of 2.3% and the S&P 500’s return of 11.2%.
However, post the earnings release, shares witnessed a nominal increase of 0.3% to close at $201.14.
Revenue Segments
The Cooper Companies has two business segments – CooperVision (CVI) and CooperSurgical (CSI).
CooperVision Segment: CVI revenues increased 7% to $389.3 million (up 9% at CER) on a year-over-year basis.
Coming to the major growth catalysts within the CVI segment, robust performance by Toric (31% of CVI revenues), Multifocal (10.9% of CVI revenues) and Single-use sphere lenses (25.6% of CVI revenues) propelled solid growth.
In fact, multi focal revenues rose 5% to $42.4 million, while Toric revenues increased 12% to $120.7 million on a year-over-year basis. Coming to the sphere lenses, single-use sphere lenses sales climbed 10% to $99.5 million, while sales of non single-use sphere lenses inched up by 1% to $126.7 million year over year.
Geographically, CVI revenues increased 8% in the Americas, while in the Asia Pacific, revenues surged 20% year over year.
CooperSurgical Segment: CSI revenues jumped 29% (up 3% at CER) to $109.8 million on a year-over-year basis.
Coming to the CSI segment, the fertility category witnessed an 83% surge in sales in the reported quarter on a year-over-year basis, totaling $56.8 million. However, the office and surgical products category at the CSI segment declined 2% to $53.0 million.
Margin Details
Adjusted gross margin in the reported quarter was 63% of revenues, as compared with 61% registered in the year-ago quarter. The gross margin improvement was fueled by favorable product mix within the CooperVision segment, courtesy of the company’s flagship Biofinity product line.
Adjusted operating margin, as a percentage of revenues, was 23% in the first quarter, compared with 22% a year ago. The major reason behind the upside is the acquisition of Wallace, a division of Smiths Group.
Guidance
For fiscal 2017, total revenue is expected in the band of $2,090–$2,130 million.
Notably, revenues at the CVI segment are estimated between $1,620 million and $1,650 million, while CSI revenues are projected in the range of $470–$480 million.
Meanwhile, adjusted earnings are anticipated in the band of $9.10–$9.30 per share, compared to the previously provided $9.00–$9.30 range.
Our Take
CooperVision continued to gain market traction, courtesy of innovative products like Biofinity and daily silicone hydrogel lenses, while CooperSurgical witnessed stellar growth in its fertility sub-segment.
Taking the stellar performance of the stock into consideration, we expect The Cooper Companies to scale higher in the coming quarters. In this regard, a positive long-term growth of 11.8% holds promise.
Other Stocks to Consider
Other favorably ranked stocks in the broader medical sector include Glaukos Corporation (GKOS - Free Report) , Avinger, Inc. (AVGR - Free Report) and Fluidigm Corporation . Notably, all the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 184.6%.
Avinger projects sales growth of 30.7% for the current year. Additionally, the company posted a positive earnings surprise of 27% in the last quarter.
Fluidigm Corporation has a long-term expected earnings growth rate of 25%. The stock added 1.23% over the last three months.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>