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Cooper Companies (COO) to Post Q3 Earnings: What's in Store?

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The Cooper Companies, Inc.’s (COO - Free Report) third-quarter fiscal 2020 results are scheduled to release on Sep 3, after the closing bell.

In the last-reported quarter, the company reported a negative earnings surprise of 29.1%.

Fiscal Q3 Estimates

For the fiscal third quarter, the Zacks Consensus Estimate for revenues is pegged at $535.6 million, suggesting a decline of 21.2% from the year-ago quarter. The same for earnings stands at $1.57 per share, indicating a decline of 51.4% from the prior-year reported figure.

Factors to Note

Cooper Companies reports revenues under two major segments — CooperVision (CVI) and CooperSurgical (CSI). However, the fiscal third quarter faced a significant impact due to the COVID-19 pandemic, which is likely to have resulted in lower revenues at these two segments.

In fact, per management, sales at CVI are expected to decline 15-20% in fiscal third quarter. For CSI, revenues are estimated to fall between 30% and 35%.

The Cooper Companies, Inc. Price and EPS Surprise

The Cooper Companies, Inc. Price and EPS Surprise

The Cooper Companies, Inc. price-eps-surprise | The Cooper Companies, Inc. Quote

Weak performance across the Americas, Asia Pacific and EMEA might get reflected in the company’s CVI segment’s fiscal third-quarter revenues. Further, decline in revenues from Single-use sphere lenses is likely to have contributed to the downside.

Additionally, CVI’s Toric and Multifocal lenses, which make Cooper Companies a dominant name in the soft contact lenses market, are likely to have exhibited sluggishness in the fiscal third quarter.

Nonetheless, Cooper Companies is likely to have witnessed encouraging performance when it comes to its MiSight 1-day contact lens (approved by the FDA in November 2019). This has been possible due to the substantial increase in interest from optometrists as they look for value-added ways to boost patient flow as their practices reopen.

Cooper Companies has been witnessing higher contact lenses demand, courtesy of the global transition to daily contact lenses by customers in recent times. Moreover, the company has made advancements in customized product offerings, which are likely to have contributed to the fiscal third-quarter performance.

Additionally, for fiscal 2020, the company expects mid-single digit growth from the PARAGARD acquisition, a trend that is likely to get reflect in the to-be-reported quarter’s results.

It is important to note here that Cooper Companies generates significant part of revenues in foreign currencies. Consequently, adverse forex might have affected the company’s overseas revenues.

Notably, Cooper Companies anticipates foreign exchange headwinds to have an impact of $11 million on fiscal 2020 revenues.

What Our Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see below.

Earnings ESP: Cooper Companies has an Earnings ESP of +7.09%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #4 (Sell).

Peer Releases

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , PerkinElmer, Inc. (PKI - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) . While PerkinElmer sports a Zacks Rank of 1, both Thermo Fisher and West Pharmaceuticals carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, which surpassed the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion surpassed the consensus mark by 0.1%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus mark by 6.9%.

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