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Cooper Companies (COO) Q2 Earnings & Revenues Top Estimates

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The Cooper Companies, Inc. (COO - Free Report) reported second-quarter fiscal 2019 adjusted earnings of $2.94 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 6.5%. The bottom line also increased 2.8% on a year-over-year basis.

Revenues came in at $654.3 million, outpacing the Zacks Consensus Estimate of $653.3 million by 0.2%. On a year-over-year basis, the top line improved 3.6%.

This California-based specialty medical device company currently carries a Zacks Rank #3 (Hold).

The Cooper Companies, Inc. Price, Consensus and EPS Surprise

 

The Cooper Companies, Inc. Price, Consensus and EPS Surprise

The Cooper Companies, Inc. price-consensus-eps-surprise-chart | The Cooper Companies, Inc. Quote

Q2 Segment Details

CooperVision (CVI)

This segment’s revenues totaled $484.2 million, up 8% on a pro-forma basis and 4% on a reported basis.

Per management, the segment saw a noticeable uptick in the Single-use sphere lenses (28% of CVI), reflecting pro-forma growth of 14%, driven by accelerating growth in both Clariti and MyDay. Single-use sphere lenses revenues totaled $135.3 million.

Toric (32% of CVI) revenues totaled $155.3 million, up 7% on a pro-forma basis.

Multifocal (10% of CVI) generated revenues of $49.7 million, up 6% at pro forma and 1% year over year.

Non single-use sphere (30% of CVI) revenues came in at $143.9 million, up 4% at pro forma and 1% from the year-ago quarter.

Geographically, the segment witnessed an improvement in revenues in the Americas (40% of CVI), up 5% at pro forma and 5% year over year to $193.4 million.

EMEA revenues (37% of CVI) totaled $181.1 million, up 8% at pro forma but down 1% from the prior-year quarter.

Asia Pacific sales (23% of CVI) rose 14% at pro forma and 9% year over year to $109.7 million.

CooperSurgical (CSI)

This segment posted revenues of $170.1 million, up 6% at pro forma and 4% year over year.

Sub-segment Office and Surgical products (62% of CSI) accounted for $105.7 million revenues, up 7% at pro forma and 8% on a year-over-year basis.

Fertility (38% of CSI) revenues were $64.4 million, down 2% year over year but up 5% at pro forma.

Margin Analysis

In the fiscal second quarter, gross profit was $432.6 million, up 6.9% year over year.  Gross margin was 66% of net revenues, up 200 basis points (bps) year over year.

On an adjusted basis, gross margin was 67%, down 100 bps year over year. The gross margin contraction was due to currency headwinds.

Operating income in the quarter was $146.9 million, up a whopping 96.7% year over year. Operating margin was 22.5%, up 1070 bps from the prior-year quarter.

FY19 Guidance Revised

Cooper Companies updated its fiscal 2019 guidance. The company expects adjusted revenues in the $2.63-$2.67 billion band compared with $2.63-$2.68 billion projected earlier. The mid-point of the current range of $2.65 billion is below the current Zacks Consensus Estimate of $2.66 billion.

Cooper Companies expects adjusted earnings per share in the $12.15-$12.35 band compared with the previous guidance of $11.85-$12.15. The mid-point of $12.25 is higher than the current Zacks Consensus Estimate of $12.01.

Notably, revenues from CVI are expected between $1,964 and $1,985 million, lower than $1,968 million and $1,995 million anticipated earlier.

Revenues from CSI are anticipated within $669-$682 million, up from the previous guidance of $663-$681 million.

Wrapping Up

Cooper Companies exited the fiscal second quarter on a strong note, wherein earnings and revenues outpaced the Zacks Consensus Estimate. Also, the company saw solid gains from its core CVI unit, which performed impressively in the United States, the EMEA and the Asia Pacific.

These apart, Cooper Companies continues to gain from the PARAGARD acquisition, which has been consistently driving CSI’s performance. Management is also optimistic about the Clarity, MyDay and Biofinity suite of products. The company’s portfolio of daily silicone hydrogel lenses makes it one of the leaders in the soft contact lens market. In the fiscal second quarter, the company paid down its debt significantly.

On the flip side, Cooper Companies’ soft genomics business is a concern. Gross margin at CVI unit was below management’s expectations. Also, foreign exchange volatility persisted in the quarter under review. Moreover, a series of acquisitions pose significant integration risks. Stiff competition in the MedTech space adds to the woes.

Earnings of MedTech Majors at a Glance

Some better-ranked stocks, which reported solid results this earning season include Masimo Corporation (MASI - Free Report) , DENTSPLY SIRONA Inc. (XRAY - Free Report) and CONMED Corporation (CNMD - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masimo Corporation reported first-quarter 2019 adjusted earnings per share (EPS) of 79 cents, which surpassed the Zacks Consensus Estimate of 75 cents. The company’s revenues improved 8.8% year over year to $231.7 million and edged past the Zacks Consensus Estimate of $223.6 million. The company carries a Zacks Rank of 2 (Buy).

DENTSPLY reported adjusted EPS of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. Revenues came in at $946.2 million and surpassed the Zacks Consensus Estimate of $917.1 million. The company carries a Zacks Rank #2.

CONMED posted first-quarter 2019 adjusted earnings per share of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the Zacks Consensus Estimate of $213 million. The company sports a Zacks Rank of 1.

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