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Why Is Bruker (BRKR) Down 11.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Bruker (BRKR - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bruker due for a breakout? 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 drivers.
Bruker Q2 Earnings Match Estimates, ’22 Sales View Down
Bruker Corporation delivered adjusted earnings per share of 45 cents in the second quarter of 2022, up 2.3% year over year. Moreover, the figure was in line with the Zacks Consensus Estimate.
Our model projected an adjusted earnings per share of 44 cents in Q2.
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 33 cents a share, reflecting a 13.2% decline from the year-earlier figure.
Revenues in Detail
Bruker registered revenues of $588.4 million in the second quarter, up 3.1% year over year. However, the figure missed the Zacks Consensus Estimate by 0.4%.
The second-quarter revenue compares to our own estimate of $600.8 million.
Excluding the positive impact of 1.6% from acquisitions and another 7.3% from negative changes in foreign currency rates, the company saw organic revenue growth of 8.8%.
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 7.3% year-over-year rise in revenues in the reported quarter. Europe revenues fell 8.3% year over year, whereas revenues in the Asia Pacific increased 14.8%. Further, the Other category’s revenues moved up2.4% 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 second quarter, BioSpin Group revenues rose 7.6% from the year-ago quarter to $159.8 million. BioSpin benefitted from the revenue recognition of one 1.2 gigahertz class NMR system in the reported quarter.
CALID revenues fell 1.6% year over year to $190.3 million in the second quarter, primarily due to supply chain issues. The business delivered a solid performance in the first six months of the year primarily owing to the timsTOF platform witnessing continued strong adoption in 4D proteomics, epiproteomics and multiomics.
Revenues in the Nano group climbed 3.9% to $182.2 million. Revenues for the company’s NANO advanced X-ray and NANO surfaces tools delivered strong growth in the first half of 2022. Nano's microelectronics and semiconductor metrology tools also performed well with strong bookings and backlog.
Nano organic revenue grew in the high single-digit percentage, driven by strength in NANO's industrial research and semiconductor businesses.
The BSI segment (including BSI Life Science and BSI Nano Segments) improved 2.9% year over year to $532.3, including organic revenue growth of 8.1%.
For the BSI segment, we projected $543.4 million revenues in the second quarter.
In the second quarter, the company’s BEST segment revenues were $59.2 million, up 4.6% year over year. The solid segmental performance in the first half of 2022 was driven by share gains and strong superconductor demand by MRI OEM customers. However, the segment continued to experience supply-chain and logistics challenges. Organically, BEST segment revenues improved 15.1%, net of intercompany eliminations.
This figure compares with the BEST revenue estimate of $61.1 million for Q2.
Margin Trend
In the quarter under review, Bruker’s gross profit rose 6.3% to $298.2 million. The gross margin expanded 152 basis points (bps) to 50.7%.
We projected an adjusted gross margin of 50.5% for Q2.
Meanwhile, selling, general & administrative expenses rose 12.9% to $152.2 million. Research and development expenses went up 6.8% year over year to $59.6 million. Adjusted operating expenses of $211.8 million increased 11.1% year over year.
Adjusted operating profit totaled $86.4 million, reflecting a 4% fall from the prior-year quarter. Further, the adjusted operating margin in the second quarter contracted 108 bps to 14.7%.
The adjusted operating margin, according to our model, was 16.9% for Q2.
Financial Position
Bruker exited the second quarter of 2022 with cash and cash equivalents and short-term investments of $723 million compared with $916.1 million at the end of first-quarter 2022. Total long-term debt (including the current portion) at the end of the second quarter of 2022 was $1.19 billion compared with $1.21 billion at the end of first-quarter 2022.
Cumulative net cash flow from operating activities at the end of the second quarter was $33.4 million compared with $119.9 million a year ago.
2022 Guidance
Bruker updated its revenue outlook for 2022 to account for stronger foreign currency translation headwinds.
The company expects revenue growth of approximately 2.5-4.5%, down from the May-announced revenue guidance of 5-7%. The Zacks Consensus Estimate for revenues is pegged at $2.57 billion. The company has reaffirmed its organic revenue growth outlook in the band of 7-9%.
The company has also maintained full-year adjusted EPS guidance in the band of $2.29-$2.33, indicating an uptick of 9-11% from the 2021 reported figure. The Zacks Consensus Estimate for the same is pegged at $2.29.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -10.59% due to these changes.
VGM Scores
Currently, Bruker has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Bruker has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Bruker (BRKR) Down 11.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Bruker (BRKR - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bruker due for a breakout? 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 drivers.
Bruker Q2 Earnings Match Estimates, ’22 Sales View Down
Bruker Corporation delivered adjusted earnings per share of 45 cents in the second quarter of 2022, up 2.3% year over year. Moreover, the figure was in line with the Zacks Consensus Estimate.
Our model projected an adjusted earnings per share of 44 cents in Q2.
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 33 cents a share, reflecting a 13.2% decline from the year-earlier figure.
Revenues in Detail
Bruker registered revenues of $588.4 million in the second quarter, up 3.1% year over year. However, the figure missed the Zacks Consensus Estimate by 0.4%.
The second-quarter revenue compares to our own estimate of $600.8 million.
Excluding the positive impact of 1.6% from acquisitions and another 7.3% from negative changes in foreign currency rates, the company saw organic revenue growth of 8.8%.
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 7.3% year-over-year rise in revenues in the reported quarter. Europe revenues fell 8.3% year over year, whereas revenues in the Asia Pacific increased 14.8%. Further, the Other category’s revenues moved up2.4% 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 second quarter, BioSpin Group revenues rose 7.6% from the year-ago quarter to $159.8 million. BioSpin benefitted from the revenue recognition of one 1.2 gigahertz class NMR system in the reported quarter.
CALID revenues fell 1.6% year over year to $190.3 million in the second quarter, primarily due to supply chain issues. The business delivered a solid performance in the first six months of the year primarily owing to the timsTOF platform witnessing continued strong adoption in 4D proteomics, epiproteomics and multiomics.
Revenues in the Nano group climbed 3.9% to $182.2 million. Revenues for the company’s NANO advanced X-ray and NANO surfaces tools delivered strong growth in the first half of 2022. Nano's microelectronics and semiconductor metrology tools also performed well with strong bookings and backlog.
Nano organic revenue grew in the high single-digit percentage, driven by strength in NANO's industrial research and semiconductor businesses.
The BSI segment (including BSI Life Science and BSI Nano Segments) improved 2.9% year over year to $532.3, including organic revenue growth of 8.1%.
For the BSI segment, we projected $543.4 million revenues in the second quarter.
In the second quarter, the company’s BEST segment revenues were $59.2 million, up 4.6% year over year. The solid segmental performance in the first half of 2022 was driven by share gains and strong superconductor demand by MRI OEM customers. However, the segment continued to experience supply-chain and logistics challenges. Organically, BEST segment revenues improved 15.1%, net of intercompany eliminations.
This figure compares with the BEST revenue estimate of $61.1 million for Q2.
Margin Trend
In the quarter under review, Bruker’s gross profit rose 6.3% to $298.2 million. The gross margin expanded 152 basis points (bps) to 50.7%.
We projected an adjusted gross margin of 50.5% for Q2.
Meanwhile, selling, general & administrative expenses rose 12.9% to $152.2 million. Research and development expenses went up 6.8% year over year to $59.6 million. Adjusted operating expenses of $211.8 million increased 11.1% year over year.
Adjusted operating profit totaled $86.4 million, reflecting a 4% fall from the prior-year quarter. Further, the adjusted operating margin in the second quarter contracted 108 bps to 14.7%.
The adjusted operating margin, according to our model, was 16.9% for Q2.
Financial Position
Bruker exited the second quarter of 2022 with cash and cash equivalents and short-term investments of $723 million compared with $916.1 million at the end of first-quarter 2022. Total long-term debt (including the current portion) at the end of the second quarter of 2022 was $1.19 billion compared with $1.21 billion at the end of first-quarter 2022.
Cumulative net cash flow from operating activities at the end of the second quarter was $33.4 million compared with $119.9 million a year ago.
2022 Guidance
Bruker updated its revenue outlook for 2022 to account for stronger foreign currency translation headwinds.
The company expects revenue growth of approximately 2.5-4.5%, down from the May-announced revenue guidance of 5-7%. The Zacks Consensus Estimate for revenues is pegged at $2.57 billion. The company has reaffirmed its organic revenue growth outlook in the band of 7-9%.
The company has also maintained full-year adjusted EPS guidance in the band of $2.29-$2.33, indicating an uptick of 9-11% from the 2021 reported figure. The Zacks Consensus Estimate for the same is pegged at $2.29.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -10.59% due to these changes.
VGM Scores
Currently, Bruker has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Bruker has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.