Back to top

Image: Bigstock

What's in Store for Cooper Companies (COO) in Q3 Earnings?

Read MoreHide Full Article

The Cooper Companies, Inc.’s (COO - Free Report) third-quarter fiscal 2019 results are scheduled to release on Aug 29, after the closing bell.

In the last reported quarter, the company delivered a positive earnings surprise of 6.5%. Further, it has an average four-quarter positive surprise of 4%.

Let’s take a look at how things are shaping up prior to this announcement.

Which Way are Q3 Estimates Treading?

For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $686.8 million, suggesting growth of 4.1% from the year-ago reported figure. The same for earnings stands at $3.16 per share, indicating an improvement of 5.3% from the year-ago quarter.

The Cooper Companies, Inc. Price and EPS Surprise

 

The Cooper Companies, Inc. Price and EPS Surprise

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

Factors to Influence Fiscal Q3

Cooper Companies reports revenues under two major segments — CooperVision (CVI) and CooperSurgical (CSI).

The company is likely to report higher revenues at CVI in the fiscal third quarter, backed by better-than-expected performance across the Americas, Asia-Pacific and EMEA. Further, accelerating growth in both Clariti and MyDay might have contributed to the possible increase in revenues.

It is encouraging to note that for fiscal 2019, Cooper Companies expects CVI sales within $1,964-$$1,985 million that indicates year-over-year growth in the band of 7-8% on a pro-forma basis.

Additionally, CVI’s Toric and Multifocal lenses, which make Cooper Companies a stalwart in the soft contact lenses market, are expected to drive fiscal third-quarter results.

Management at Cooper Companies anticipates witnessing higher contact lenses demand due to the global transition to daily contact lenses by customers. Moreover, the company has made advancements in its customized product offerings which are expected to ramp up fiscal third-quarter sales.

Coming to CSI, management is optimistic about the acquisition of Incisive Surgical earlier this year. This is expected to boost the company’s specialty lens business in the quarter to be reported.

The company’s CSI segment is likely to report revenue growth in the to-be-reported quarter on the back of anticipated higher sales in PARAGARD.

It is encouraging to note that for fiscal 2019, Cooper Companies expects CSI sales within $669-$682 million, up from the previous guidance of $663-$681 million.

The company is likely to report bottom-line growth in the fiscal third quarter primarily driven by its market-leading products and solid operational execution.

It is important to note here that Cooper Companies generates a significant part of its revenues in foreign currencies. Adverse forex can affect the company’s overseas revenues.

Notably, Cooper Companies expects foreign exchange headwinds to have an impact of 62 cents per share on earnings and $66 million on revenues on a year-over-year basis in 2019. Consequently, we can expect to witness a similar trend in the to-be-reported quarter.

What Our Quantitative Model Suggests

Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. This is the case here.

Earnings ESP: Cooper Companies has an Earnings ESP of +1.50%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: Cooper Companies carries a Zacks Rank #2.

Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Peer Releases

Here are three stocks that reported solid results in this earnings season.

CONMED Corporation (CNMD - Free Report) delivered second-quarter 2019 adjusted earnings per share of 56 cents, which beat the Zacks Consensus Estimate of 53 cents by 5.7%. Revenues of $238.3 million surpassed the Zacks Consensus Estimate by 2.2%. The company carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Baxter International Inc. (BAX - Free Report) delivered third-quarter 2019 adjusted earnings of 89 cents per share, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion outpaced the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company carries a Zacks Rank #2.

Intuitive Surgical, Inc. (ISRG - Free Report) reported third-quarter 2019 adjusted earnings per share of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company carries a Zacks Rank #2.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>