The Cooper Companies, Inc. (COO - Free Report) posted second-quarter fiscal 2018 adjusted earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 1.1%. Earnings also increased 14.4% on a year-over-year basis.
The California-based specialty medical device company reported revenues worth $631.3 million, which surpassed the Zacks Consensus Estimate by 0.8%. Revenues improved 20.8% from the prior-year quarter and 5% on a pro forma basis (defined as constant exchange rate and including acquisitions in both periods).
Meanwhile, Cooper’s shares have declined 0.8% against the industry’s rise of 5.7% in the past six months.
The stock currently carries a Zacks Rank #3 (Hold).
Segment Details
Cooper reports revenues in two major segments — CooperVision (CVI) and CooperSurgical (CSI).
CVI
This segment garnered revenues worth $467.5 million, up 14% on a year-over-year basis and 6% at cc. Per management, overall CVI sales have been driven by strong performance by the silicone hydrogel portfolio of Clariti and MyDay.
Toric (32% of CVI) revenues raked in $150.8 million, up 8% at cc, while Multifocal (10%) generated revenues worth $49.1 million, up 7% at cc.
Single-use sphere (27%) posted revenues worth $124.4 million, up 19% from the prior-year quarter. Non single-use sphere (31%) revenues came in at $143.2 million, up 10% from a year ago.
Geographically, the segment saw a strong quarter. U.S. revenues rose 7% to $183.6 million on a year-over-year basis and 6% at cc. Management expects the U.S. growth momentum to be strong in the second half on fiscal 2018, with growth expected in upper single-digits.
Revenues rose 20% on a year-over-year basis in both EMEA and Asia Pacific.
CSI
This segment posted revenues of $163.8 million, up 44% from a year ago and 3% at cc. Per management, growth was led by strength in PARAGARD and the fertility solutions product offerings.
Sub-segment Office and Surgical products (60% of CSI) accounted for $97.9 million, up a whopping 86% year over year. Fertility (40%) posted sales worth $65.9 million, up 8% year over year.
Margin Analysis
As a percentage of revenues, adjusted gross margin at the CSI segment was 71% in the reported quarter, up 900 basis points (bps) compared with the prior-year quarter.
As a percentage of revenues, adjusted gross margin at the CVI segment was 68% in the reported quarter, higher than 67% of revenues in the year-ago quarter.
In the second quarter, gross profit as a whole for Cooper Companies, totaled $431.3 million, up 25% from the year-ago quarter. Adjusted gross margin was 68.3%, which expanded 230 bps.
Operating income in the quarter totaled $180.2 million, up 28.8% from the prior-year figure. Adjusted operating margin was 28.5%, up 170 bps.
Guidance Updated
Cooper updated its revenue guidance for fiscal 2018.
The company now expects fiscal 2018 revenues within $2,515-$2,550 million compared with the previous range of $2,510-$2,560 million. Notably, the Zacks Consensus Estimate for the same is pegged at $2.53 billion, which lies within the projected range.
Revenues at the CVI segment are now estimated in the band of $1,870-$1,890 million, compared with $1,870-$1,890 million stated previously. However, CSI revenue range has been kept intact at $645-$660 million.
Fiscal 2018 adjusted earnings per share are anticipated between $11.70 and $11.90. The Zacks Consensus Estimate for earnings is pinned at $11.80, within the projected range.
In Conclusion
Cooper wrapped up fiscal second quarter on a solid note. Strong performance by CooperVision buoys optimism. Geographically as well, the company put up a solid show. The acquisition of PARAGARD drove CooperSurgical revenues. Management is optimistic about the recently-completed acquisition of LifeGlobal which is expected to enhance Cooper’s fertility business. Further, the continued improvement in gross and operating margin is promising.
On the flip side, Cooper’s long-term debt has increased significantly, which raises concern. Moreover, continued acquisitions pose integration risks. Stiff competition in the niche space adds to the woes.
Key Picks
A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
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The Cooper Companies, Inc. (COO - Free Report) posted second-quarter fiscal 2018 adjusted earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 1.1%. Earnings also increased 14.4% on a year-over-year basis.
The California-based specialty medical device company reported revenues worth $631.3 million, which surpassed the Zacks Consensus Estimate by 0.8%. Revenues improved 20.8% from the prior-year quarter and 5% on a pro forma basis (defined as constant exchange rate and including acquisitions in both periods).
Meanwhile, Cooper’s shares have declined 0.8% against the industry’s rise of 5.7% in the past six months.
The stock currently carries a Zacks Rank #3 (Hold).
Segment Details
Cooper reports revenues in two major segments — CooperVision (CVI) and CooperSurgical (CSI).
CVI
This segment garnered revenues worth $467.5 million, up 14% on a year-over-year basis and 6% at cc. Per management, overall CVI sales have been driven by strong performance by the silicone hydrogel portfolio of Clariti and MyDay.
Toric (32% of CVI) revenues raked in $150.8 million, up 8% at cc, while Multifocal (10%) generated revenues worth $49.1 million, up 7% at cc.
Single-use sphere (27%) posted revenues worth $124.4 million, up 19% from the prior-year quarter. Non single-use sphere (31%) revenues came in at $143.2 million, up 10% from a year ago.
Geographically, the segment saw a strong quarter. U.S. revenues rose 7% to $183.6 million on a year-over-year basis and 6% at cc. Management expects the U.S. growth momentum to be strong in the second half on fiscal 2018, with growth expected in upper single-digits.
Revenues rose 20% on a year-over-year basis in both EMEA and Asia Pacific.
CSI
This segment posted revenues of $163.8 million, up 44% from a year ago and 3% at cc. Per management, growth was led by strength in PARAGARD and the fertility solutions product offerings.
Sub-segment Office and Surgical products (60% of CSI) accounted for $97.9 million, up a whopping 86% year over year. Fertility (40%) posted sales worth $65.9 million, up 8% year over year.
Margin Analysis
As a percentage of revenues, adjusted gross margin at the CSI segment was 71% in the reported quarter, up 900 basis points (bps) compared with the prior-year quarter.
As a percentage of revenues, adjusted gross margin at the CVI segment was 68% in the reported quarter, higher than 67% of revenues in the year-ago quarter.
In the second quarter, gross profit as a whole for Cooper Companies, totaled $431.3 million, up 25% from the year-ago quarter. Adjusted gross margin was 68.3%, which expanded 230 bps.
Operating income in the quarter totaled $180.2 million, up 28.8% from the prior-year figure. Adjusted operating margin was 28.5%, up 170 bps.
Guidance Updated
Cooper updated its revenue guidance for fiscal 2018.
The company now expects fiscal 2018 revenues within $2,515-$2,550 million compared with the previous range of $2,510-$2,560 million. Notably, the Zacks Consensus Estimate for the same is pegged at $2.53 billion, which lies within the projected range.
Revenues at the CVI segment are now estimated in the band of $1,870-$1,890 million, compared with $1,870-$1,890 million stated previously. However, CSI revenue range has been kept intact at $645-$660 million.
Fiscal 2018 adjusted earnings per share are anticipated between $11.70 and $11.90. The Zacks Consensus Estimate for earnings is pinned at $11.80, within the projected range.
In Conclusion
Cooper wrapped up fiscal second quarter on a solid note. Strong performance by CooperVision buoys optimism. Geographically as well, the company put up a solid show. The acquisition of PARAGARD drove CooperSurgical revenues. Management is optimistic about the recently-completed acquisition of LifeGlobal which is expected to enhance Cooper’s fertility business. Further, the continued improvement in gross and operating margin is promising.
On the flip side, Cooper’s long-term debt has increased significantly, which raises concern. Moreover, continued acquisitions pose integration risks. Stiff competition in the niche space adds to the woes.
Key Picks
A few better-ranked stocks in the broader medical space which have reported solid results this season are Intuitive Surgical (ISRG - Free Report) , Chemed Corporation (CHE - Free Report) and Baxter International Inc. (BAX - Free Report) . While Intuitive Surgical sports a Zacks Rank #1 (Strong Buy), Chemed and Baxter carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical reported first-quarter 2018 adjusted earnings per share of $2.44, which beat the Zacks Consensus Estimate by 22.6%. Revenues totaled $848 million, also surpassing the consensus estimate by 10.6%.
Chemed posted first-quarter 2018 adjusted earnings per share of $2.72, surpassing the Zacks Consensus Estimate of $2.37. Revenues came in at $439.2 million, beating the Zacks Consensus Estimate of $420 million.
Baxter posted first-quarter 2018 adjusted earnings per share of 70 cents, which beat the Zacks Consensus Estimate by 12.9%. Revenues of $2.68 billion also edged past the Zacks Consensus Estimate of $2.62 billion.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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