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Why Is Bruker (BRKR) Up 6.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Bruker (BRKR - Free Report) . Shares have added about 6.3% 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 Q1 Earnings Surpass Estimates, Margins Up

Bruker Corporation delivered adjusted earnings per share of 49 cents in the first quarter of 2022, reflecting a rise of 11.4% year over year. Moreover, the figure surpassed the Zacks Consensus Estimate by 19.5%.

The adjustments include expenses related to purchased intangible amortization, acquisition-related costs and restructuring costs, among others.

GAAP earnings per share for the quarter was 41 cents a share, reflecting a 10.% rise from the year-earlier figure.

Revenues in Detail

Bruker registered revenues of $595 million in the first quarter, up 7.3% year over year. However, the figure surpassed the Zacks Consensus Estimate by 3.9%.

Excluding the positive impact of 1% from acquisitions and another 4.2% from negative changes in foreign currency rates, the company saw organic revenue growth of 10.5%.

Solid performances by all the reporting segments driven by robust demand for the company’s solutions and products significantly drove the top line.

Geographically, the United States witnessed a 30.3% year-over-year rise in revenues in the reported quarter. Europe revenues fell 8.2% year over year, whereas revenues in the Asia Pacific increased 4.7%. Further, the Other category’s revenues climbed 39.4% year over year.

Segments in Detail

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

In the first quarter, BioSpin Group revenues fell 1% from the year-ago quarter to $157.8 million. However, BioSpin saw robust growth in revenues in the preclinical imaging business and BioSpin achieved double-digit bookings growth.

CALID revenues rose 5.6% year over year to $202.2 million in the first quarter, primarily resulting from the strong growth in microbiology and molecular spectroscopy. The company’s timsTOF platform continues to witness strong adoption in 4D proteomics, epiproteomics and multiomics.

Revenues in the Nano group climbed 15.6% to $178.5 million. Revenues for the company’s NANO advanced X-ray and NANO surfaces tools delivered strong growth in the quarter, and NANO's microelectronics and semicon metrology tools performed well with strong bookings and backlog.

The BSI segment (including BSI Life Science and BSI Nano Segments) improved 6.6% year over year, including organic revenue growth of 9.5%.

In the first quarter, the company’s BEST segment revenues were $59.7 million, up 13.9% year over year. The solid segmental performance was driven by share gains and strong superconductor demand by MRI OEM customers. Despite healthy superconductor demand, this segment experienced supply-chain challenges due to material shortage and flow logistics.

Organically, BEST segment revenues improved 21%, net of intercompany eliminations.

Margin Trend

In the quarter under review, Bruker’s gross profit rose 9.9% to $306.3 million. Gross margin expanded 124 basis points (bps) to 51.5%.

Meanwhile, selling, general & administrative expenses rose 10.5% to $145.7 million. Research and development expenses went up 3.7% year over year to $56.6 million. Adjusted operating expenses of $202.3 million increased 8.4% year over year.

Adjusted operating profit totaled $104 million, reflecting a 12.9% rise from the prior-year quarter. Further, adjusted operating margin in the third quarter expanded 88 bps to 17.5%.

Financial Position

Bruker exited the first quarter of 2022 with cash and cash equivalents, and short-term investments of $916.1 million compared with $1.17 billion at the end of fourth-quarter 2021. Total long-term debt (including current portion) at the end of the first quarter of 2022 was $1.21 billion compared with $1.22 billion at the end of fourth-quarter 2021.

Cumulative net cash flow from operating activities at the end of the first quarter was $77.8 million compared with $98 million a year ago.

The company has a five-year annualized dividend growth rate of 1.28%.

2022 Guidance

Bruker raised its financial outlook for 2022 organic revenue growth, considering the strong demand for its high-performance life science tools, scientific instruments, and diagnostic solutions.

The company now expects organic revenue growth of approximately 7.9%. This compares with the previously guided organic revenue growth of 6-8%. The Zacks Consensus Estimate for revenues is pegged at $2.56 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Bruker has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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

Bruker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Bruker belongs to the Zacks Instruments - Scientific industry. Another stock from the same industry, PerkinElmer (PKI - Free Report) , has gained 2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

PerkinElmer reported revenues of $1.26 billion in the last reported quarter, representing a year-over-year change of -3.7%. EPS of $2.41 for the same period compares with $3.72 a year ago.

For the current quarter, PerkinElmer is expected to post earnings of $2.04 per share, indicating a change of -27.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.9% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PerkinElmer. Also, the stock has a VGM Score of B.


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