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Cooper Companies (COO) to Post Q4 Earnings: What's in Store?

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

In the last-reported quarter, the company reported an earnings surprise of 44.3%.

Fiscal Q4 Estimates

For the fiscal fourth quarter, the Zacks Consensus Estimate for revenues is pegged at $679.2 million, suggesting a decline of 1.8% from the year-ago quarter. The same for earnings stands at $3.11 per share, indicating a decline of 5.8% from the prior-year reported figure.

Factors to Note

Cooper Companies reports revenues under two major segments — CooperVision (CVI) and CooperSurgical (CSI). Although both the segments displayed weak performance in the fiscal third quarter due to the significant impact of the COVID-19 pandemic, the results were much better than expected as both these segments bounced back from the lows despite the disruption. Hence, the company is likely to have benefitted from this recovery in the to-be-reported quarter.

However, weak performance across the Americas, Asia Pacific and EMEA might get reflected in the company’s CVI segment’s fiscal fourth-quarter revenues. Further, decline in revenues from Single-use sphere lenses is likely to have weighed on the to-be-reported quarter’s performance.

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

Additionally, CVI’s Toric and Multifocal lenses, which make Cooper Companies a dominant presence in the soft contact lenses market, are likely to have exhibited sluggishness in the fiscal fourth 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 owing to the substantial increase in interest from optometrists as they look for value-added ways to boost patient flow as their practices reopen. Per fiscal-third quarter 2020 earnings call, management anticipates robust growth in the fiscal fourth quarter as the U.S. MiSight launch is currently fully underway.

With respect to CVI, the Cooper Companies’ Biofinity toric multifocal is now available in the United States and the company is successfully continuing its global launch. Moreover, the company has made substantial progress on MyDay manufacturing, and is now able to supply product to markets where they were earlier pulled back from.

Coming to CSI, the segment remains focused on making products in many other areas of the business, including development and transferring of IVF production into the company’s global manufacturing facility in Costa Rica. More importantly, the company’s manufacturing and distribution teams kept the products available and shipping when several competitors were found struggling, thereby providing it the opportunity for future share gains.

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 been making advancements in customized product offerings, which are likely to have contributed to the fiscal fourth-quarter performance.

Additionally, for fiscal 2020, the company expects mid-single digit growth from the PARAGARD acquisition, a trend that is likely to get reflected 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 its overseas revenues.

Notably, in the fiscal third quarter, the company witnessed negative year-over-year impact of forex on revenues worth $3.3 million, a trend that is likely to get reflected in the fiscal fourth quarter results.

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 0.00%. 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 #2.

Peer Releases

Some other top-ranked stocks in the broader medical space that have already announced their quarterly results include Thermo Fisher Scientific Inc. (TMO - Free Report) , Align Technology, Inc. (ALGN - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

AngioDynamics reported first-quarter fiscal 2021 adjusted earnings per share (EPS) of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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