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Cooper Companies (COO) Misses on Q1 Earnings, Lifts View

The Cooper Companies, Inc. COO reported first-quarter fiscal 2020 adjusted earnings per share (EPS) of $2.69, which lagged the Zacks Consensus Estimate of $2.71. The bottom line deteriorated 6.6% on a year-over-year basis.

Revenues of this Zacks Rank #3 (Hold) company came in at $646.2 million, beating the Zacks Consensus Estimate by 0.3%. Also, on a year-over-year basis, the top line improved 2.9%.

Q1 Segment Details

CooperVision (CVI)

This segment’s revenues totaled $485.2 million, up 3% at constant currency (cc) and 4% on a reported basis.

Per management, the segment saw a substantial uptick in revenues from Single-use sphere lenses (28% of CVI), reflecting growth of 5% at cc on accelerating growth in both Clariti and MyDay. Single-use sphere lenses revenues totaled $138.1 million.

Toric (32% of CVI) revenues totaled $155.1 million, up 7% at cc.

Multifocal (11% of CVI) generated revenues of $51.8 million, up 6% at cc.

Non single-use sphere (29% of CVI) revenues came in at $140.2 million, down 1% at cc and 2% from the year-ago quarter.

Geographically, the segment witnessed an improvement in revenues in the Americas (39% of CVI), up 8% at cc and 8% year over year to $189.4 million.

EMEA revenues (39% of CVI) totaled $187 million, up 3% at cc and 1% from the prior-year quarter.

Asia Pacific sales (22% of CVI) declined 1% at cc and 1% year over year to $108.8 million.

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


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

CooperSurgical (CSI)

This segment posted revenues of $161 million, up 2% at cc and also year over year.

Sub-segment Office and Surgical products (61% of CSI) accounted for $98.5 million revenues, up 3% at cc and on a year-over-year basis.

Fertility (39% of CSI) revenues were $62.5 million, flat year over year and up 1% at cc.

Margin Analysis

In the fiscal first quarter, gross profit was $426.5 million, up 1.9% year over year.  Gross margin was 66% of net revenues, down 60 basis points (bps) year over year.

On an adjusted basis, gross margin was 67%, flat year over year.

Operating income in the quarter totaled $111.1 million, up 0.2% year over year. Adjusted operating margin was 25%, down 100 bps from the prior-year quarter.

FY20 View Updated

For fiscal 2020, Cooper Companies continues to expect revenues within $2,767-$2,817 million, suggesting 5-7% growth at cc. The Zacks Consensus Estimate for the same is pegged at $2.80 billion.

CVI revenues are expected between $2,070 million and $2,100 million (5.5-7% at cc).

CSI revenues are estimated in the range of $697-$717 million (3-6% at cc).

Adjusted EPS is projected within $12.80-$13.20. This compares to the previously communicated range of $12.60-$13.00. The Zacks Consensus Estimate for the same stands at $12.80.

Wrapping Up

Cooper Companies exited the fiscal first quarter on a tepid note. The company saw solid gains from its core CVI unit, which performed impressively in the United States and the EMEA with high pro-forma growth. Apart from these, management is 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. A raised view for fiscal 2020 EPS buoys optimism. Cooper Companies has also kept its revenue guidance intact.

On the flip side, the contraction in margins raises concern. Moreover, the company’s top line declined on a year-over-year basis in the quarter. Non single-use sphere sales were soft, while CVI revenues declined in the APAC.

Earnings of Other MedTech Majors at a Glance

Some better-ranked companies, which reported solid results this earnings season, include Stryker Corporation SYK, Accuray Incorporated ARAY and IDEXX Laboratories, Inc. IDXX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker reported fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Revenues of $4.13 billion surpassed the consensus estimate by 0.7%.

Accuray reported second-quarter fiscal 2020 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the consensus mark by 0.3%.

IDEXX Laboratories reported fourth-quarter 2019 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate of 91 cents by 14.3%. Revenues were $605.4 million, surpassing the Zacks Consensus Estimate by 0.9%.

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