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Cooper Companies Extends Share Repurchase

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The Cooper Companies Inc. (COO - Free Report) revealed that its board of directors expanded its existing share repurchase program by authorizing an additional $200.0 million shares. This has brought the total repurchase authorization to $500.0 million worth of shares. After the announcement, shares of the company rose 2.2% to $122.14 till yesterday.

The Pleasanton, Calif.-based contact lens maker initiated the share repurchase program in December, 2011, authorizing share repurchase up to $150.0 million. The 2011 share repurchase program was amended in December 2012, enhancing the total authorization to $300.0 million and changing the expiration date to indefinite.

After the amendment, COO repurchased 460 thousand shares for $44.4 million in the fiscal-first quarter ended Jan 31, 2013 and then 960 thousand shares for $123.0 million in the fiscal-fourth quarter ended Oct 31, 2013. Currently, the repurchase program has $261.5 million worth of shares remaining for repurchase without any expiration date.

Cooper Companies reported earnings and revenues for the fiscal fourth quarter ended Oct 31, 2013, both of which lagged the Zacks Consensus Estimate. The company’s adjusted earnings of $1.48 per share exceeded the year-ago level earnings merely by a penny. It missed the Zacks Consensus Estimate by 32 cents as well as the company’s own guidance of $1.76–$1.81 for the quarter.

Revenues in the quarter grew 3.9% to $411.9 million, which was below the Zacks Consensus Estimate of $422 million but consistent with the COO’s guidance between $410 and $425 million (albeit at the lower end). The company benefited from its Biofinity lineups and launch of MyDay daily disposable lenses.

For fiscal 2013, Cooper Companies posted a 15.3% rise in adjusted earnings to $5.95 per share from $5.16 a year ago. Revenues increased 9.9% to $1,587.7 million, and 8% excluding currency and acquisitions. CVI revenues grew 7% (10% in constant currency) to $1,268.3 million, and CSI revenues surged 25% (3% excluding acquisitions) to $319.4 million.

For fiscal 2014, COO expects total revenues between $1,675 and $1,735 million, including CVI and CSI revenues of $1,355–$1,395 million and $320–$340 million, respectively. Both reported and adjusted earnings are expected in the range of $6.70–$7.00 for the year. The Zacks Consensus Estimates for 2014 revenues and earnings are $1,703 million and $6.83, respectively.

Currently, Cooper Companies carries a Zacks Rank #4 (Sell). While we avoid COO, some better-ranked medical/dental supplies stocks include McKesson Corporation (MCK - Free Report) , Align Technology Inc. (ALGN - Free Report) , and Cardinal Health, Inc. (CAH - Free Report) . McKesson Corporation carries a Zacks Rank #1 (Strong Buy), while both Align Technology and Cardinal Health carry a Zacks Rank #2 (Buy).

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