A month has gone by since the last earnings report for Bruker (BRKR Quick QuoteBRKR - Free Report) . Shares have added about 17.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Bruker due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Bruker’s Q3 Earnings & Revenues Surpass Estimates

Bruker delivered adjusted earnings per share of 42 cents in the third quarter of 2020, down 2.3% year over year. However, the figure surpassed the Zacks Consensus Estimate by 27.3%.

The adjustments include expenses related to purchased intangible amortization and restructuring costs.

GAAP earnings per share for the quarter was 35 cents a share, marking a 10.3% decline from the year-earlier figure.

Revenues in Detail

Bruker registered revenues of $511.4 million in the third quarter, down 1.9% year over year. However, the figure surpassed the Zacks Consensus Estimate by 5.3%.

Excluding a positive impact of 0.3% from acquisitions and a 2.4% positive impact from changes in foreign currency rates, the company recorded organic revenue decline of 4.6%.

The fall in reported and organic revenues resulted from softer global instrumentation demand from the academic and industrial customers, along with lower demand for BEST superconductors during the pandemic and economic slowdown.

Geographically, the United States witnessed an 11.4% decline in revenues in the reported quarter. Also, the Other category’s revenues declined 21.5%. However, Europe revenues rose 8.2% year over year, with revenues in the Asia Pacific edging up 0.9%.

Segments in Details

Bruker reports results under three segments — BSI Life Science (comprising BioSpin and CALID), BSI NANO and BEST.

In the third quarter, BioSpin Group revenues improved 5.8% from the year-ago quarter to $152.1 million due to favorable customer response toward the Avance NEO 1.2 GHz Nuclear Magnetic Resonance (“NMR”) system, which was successfully installed at the Eidgenössische Technische Hochschule (ETH) in Zurich, Switzerland.

CALID revenues were up 8.3% year over year to $171.3 million, primarily resulting from continued growth in Daltonics microbiology and infectious disease diagnostics, and Life Science mass spectrometry businesses. CALID's microbiology and infectious disease consumables, which include the MALDI Biotyper Consumables and Bruker high molecular diagnostic consumables and timsTOF proteomics revenues, recorded significant growth year over year. Further, Bruker’s high-end diagnostics business gained from strength in PCR products, mainly in Europe.

Total BSI Life Science revenues were $323.4 million, up 7.1% year over year.

Revenues in the Nano group fell 13.4% to $147.1 million due to lower demand from academic, industrial and industrial research customers.

Organic revenues and revenues at constant exchange rate or CER of the BSI segment (including BSI Life Science and BSI Nano Segments) declined 3% and 0.3% year over year, respectively.

In the third quarter, the company’s BEST segment’s revenues were $43.8 million, indicating a fall of 16.6% year over year, resulting from lower demand for superconductors by MRI companies.

Organically, the BEST segment revenues declined 20.3% year over year, net of intercompany eliminations. At CER, the segment fell 17%.

Margin Trend

In the quarter under review, Bruker’s gross profit fell 2.2% to $248.3 million. Gross margin contracted 17 basis points (bps) to 48.6%.

Meanwhile, selling, general & administrative expenses fell 8.5% to $114.6 million. However, research and development expenses went up 4.8% year over year to $48.3 million. Adjusted operating expenses of $162.9 million declined 4.9% year over year.

Adjusted operating profit totaled $85.4 million, reflecting a 3.5% uptick from the prior-year quarter. Further, adjusted operating margin in the third quarter expanded 87 bps to 16.7%.

Financial Positions

Bruker exited the third quarter with cash and cash equivalents, and short-term investments of $617.1 million compared with $796.8 million at the end of the second quarter. Long-term debt (including current portion) at the end of the third quarter was $829.9 million compared with $1.02 billion at the end of the second quarter of 2020.

Cumulative net cash flow from operating activities at the end of the third quarter was $129.2 million compared with $77.2 million in the year-ago period.

The company incurred expenses of $18.5 million as payment of dividends to common stockholders and repurchased $55 million worth of stocks for the first nine months of 2020. As of Sep 30, Bruker had $102.7 million remaining under its share repurchase authorization.

2020 Guidance

Bruker’s 2020 financial guidance remains suspended due to challenging business conditions created by the pandemic. However, the company expects to witness a continued negative year-over-year impact of the pandemic on the fourth-quarter results.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Bruker has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Bruker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.