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Bruker (BRKR) Up 7.5% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Bruker (BRKR - Free Report) . Shares have added about 7.5% 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 drivers.

Bruker Q1 Revenue Grows on Strong NANO Business

Bruker delivered adjusted earnings per share (EPS) of 28 cents in the first quarter of 2019, up 16.7% from the year-ago figure as well as the Zacks Consensus Estimate.

On a reported basis, earnings were 20 cents a share compared with the year-earlier figure of 17 cents.

Revenues in Detail

Bruker registered revenues of $461.4 million in the first quarter, up 6.9% year over year. The top line also surpassed the Zacks Consensus Estimate by 1.4%.

Excluding a positive effect of 6% from acquisitions and a 4.6% negative impact from changes in foreign currency rates, Bruker generated higher organic revenues of 5.5% year over year.

The company’s organic revenue growth was driven by strength in Bruker Scientific Instruments (BSI) and BEST segments.

Geographically, the United States saw 12.2% growth in the reported quarter. Meanwhile, European revenues dipped 3.9% year over year. Also, Asia Pacific revenues slipped 19.9%. In Other category, revenues declined 5.4%.

Bruker’s BioSpin Group revenues slid 3% below the year-ago quarter’s level as during this period, some orders and installations were shifted to future periods. Revenues in the NANO group rose 13.6%, fueled by a strong uptrend in the academic research and industrial research markets. CALID revenues were up 12.9% year over year.

Margin Trend

Gross margin in the quarter under review expanded 34 basis points (bps) to 46.5%. While selling, general & administrative expenses climbed 8.9% to $120.1 million. Research and development expenses went up 7.4% year over year to $46.4 million. Overall, adjusted operating margin contracted 19 bps to 10.4%.

Financial Position

Bruker exited the first quarter of 2019 with cash and cash equivalents of $298.8 million, down from $322.4 million at the end of 2018. Year-to-date operating cash flow was $14.2 million in comparison to $43.8 million in the year-ago period.

2019 Guidance

Bruker has raised its 2019 outlook. For the full year, the company currently projects approximately 7-8% revenue growth (earlier forecast was 6-7% increase) including nearly 4.5-5.5% organic revenue rise (past expectation was 4-5% rise) and an estimated 2.5% headwind (previous prediction was 2%) from adverse foreign currency translation.

The company envisions a year-over-year expansion of 90-120 bps (earlier view was 70-100 bps) in adjusted operating margin.

For 2019, Bruker anticipates its adjusted EPS view in the range of $1.57-$1.61 (earlier band was $1.54-$1.58), up 12-15% from the prior-year’s figure. The Zacks Consensus Estimate of $1.60 remains within this guided range.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

Currently, Bruker has a subpar Growth Score of D, however its Momentum Score is doing a bit better 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Bruker has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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