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Bruker (BRKR) Tops Q1 Earnings Estimates, Raises '23 Outlook

Bruker Corporation BRKR delivered adjusted earnings per share (EPS) of 64 cents in the first quarter of 2023, up 30.6% year over year. The figure exceeded the Zacks Consensus Estimate by 16.4%.

The adjustments include expenses related to the amortization of purchased intangibles, acquisition-related costs and restructuring costs, among others.

GAAP EPS for the quarter was 52 cents, reflecting a 26.8% rise from the year-earlier figure.

Revenues in Detail

Bruker registered revenues of $685.3 million in the first quarter, up 15.2% year over year. The figure topped the Zacks Consensus Estimate by 7.4%.

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Excluding the positive impact of 2.1% from acquisitions and a 4.5% impact from negative changes in foreign currency rates, the company witnessed organic revenue growth of 17.6%.

Bruker Corporation Price, Consensus and EPS Surprise

Bruker Corporation Price, Consensus and EPS Surprise
Bruker Corporation Price, Consensus and EPS Surprise

Bruker Corporation price-consensus-eps-surprise-chart | Bruker Corporation Quote

Geographically, the United States witnessed a 13% year-over-year rise in revenues in the reported quarter. Europe revenues increased 10.2% year over year, whereas revenues in the Asia Pacific increased 27.2%. The Other category’s revenues moved down 3.3% year over year.

Segments in Detail

Bruker reports results under three segments — BSI Life Science (comprising BioSpin and CALID), BSI Nano and BEST.

In the first quarter, BioSpin Group’s revenues rose 14.3% from the year-ago quarter to $180.3 million, driven by solid growth in the preclinical imaging and performance of nuclear magnetic resonance instruments, even without any GHz-class systems.

CALID’s revenues increased 16.5% year over year to $236.7 million in the first quarter. Organic revenues were up in the low 20% range driven by robust life science mass spectrometry and stronger bookings than revenues.

Revenues of the Nano group climbed 17.4% to $209.6 million. Nano’s organic revenues grew in the low 20% range, led by strength in industrial research, greentech and its’ semicon/microelectronics business.

In the first quarter, the company’s Bruker Energy & Supercon Technologies’ revenues were $62.2 million, up 4.2% year over year.

Margin Trend

In the quarter under review, Bruker’s gross profit rose 17.4% to $359.7 million. The gross margin expanded 101 basis points (bps) to 52.5%. The increase can be attributed to volume leverage, a higher Project Accelerate mix and pricing, partly offset by inflation and supply chain headwinds.

SG&A expenses rose 11.7% to $162.7 million. Research and development expenses went up 22% year over year to $69 million. Adjusted operating expenses of $231.7 million increased 14.5% year over year.

The adjusted operating profit totaled $128 million, reflecting a 23.1% rise from the prior-year quarter. Further, the adjusted operating margin in the first quarter expanded 120 bps to 18.7%.

Financial Position

Bruker exited the first quarter of 2023 with cash and cash equivalents and short-term investments of $597.9 million compared with $645.5 million at the end of 2022. The total long-term debt (including the current portion) at the end of the first quarter was $1.23 billion compared with $1.22 billion at the end of 2022.

The cumulative net cash flow from operating activities at the end of the first quarter was $87.5 million compared with $77.8 million in the year-ago period.

2023 Guidance

Bruker updated its outlook for 2023.

For the full year, the company expects revenues in the range of $2.83-$2.88 billion (previously $2.81-$2.86 billion). This indicates reported revenue growth of 12%-14% (earlier 11%-13%) and year-over-year organic revenue growth in the band of 9%-11% (previously 8%-10%).

The Zacks Consensus Estimate for revenues is pegged at $2.83 billion.

BRKR expects its full-year adjusted EPS in the band of $2.55-$2.60 (earlier $2.52-$2.57). The updated guidance suggests an uptick of 9%-11% (earlier 8%-10%) from the 2022 reported figure. The Zacks Consensus Estimate for the same is pegged at $2.55 per share.

Our Take

Bruker ended the first quarter of 2023 with better-than-expected earnings and revenues. The top line reflects a robust performance across all its operating segments and geographies, backed by the continued demand for the company’s differentiated scientific instruments and life-science solutions. BRKR’s raised guidance for 2023 factors upon the quarter’s performance and strength in bookings and backlog, which buoy optimism.

The expansion of the gross margin is an upside. The company’s adjusted operating margin benefited from Project Accelerate 2.0 high-growth and high-margin initiatives, particularly in proteomics and spatial biology.

In March 2023, Bruker announced the expansion of its fundamental research infrastructure in the United Kingdom, with orders for two 1.2 GHz Avance NMR spectrometers. The products will be delivered to the University of Warwick and the University of Birmingham.

Zacks Rank & Other Key Picks

Bruker currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation EW, Intuitive Surgical, Inc. ISRG and Johnson & Johnson JNJ.

Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.

Intuitive Surgical, having a Zacks Rank #2, reported a first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.

Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.

Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.

Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.

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