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Cooper Companies (COO) Q2 Earnings and Revenues Beat Estimates

The Cooper Companies, Inc. COO reported second-quarter fiscal 2023 adjusted earnings per share (EPS) of $3.08, which beat the Zacks Consensus Estimate of $3.01 by 2.3%. The bottom line, however, declined 5% on a year-over-year basis.

GAAP EPS in the quarter deteriorated 69% from the year-ago period to 80 cents primarily due to higher costs and expenses.

Revenue Details

Revenues of this Zacks Rank #3 (Hold) company totaled $877.4 million, which outpaced the Zacks Consensus Estimate by 1.7%. The top line improved 6% on a year-over-year basis and 9% at constant currency (cc).

The figure rose 8% organically. Strong revenue growth across all segments and geographies was partially offset by an unfavorable currency movement. This, in turn, hurt the sales growth of CooperVision (“CVI”) and CooperSurgical (“CSI”) in the EMEA and Asia Pacific regions.

Segmental Details

CooperVision:The segment’s revenues totaled $589.3 million, up 10% at cc and 6% on a reported basis. Organically, sales were also up 10%.

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Per management, the segment witnessed an increase in revenues from single-use sphere lenses (29% of CVI), indicating an improvement of 8% at cc and 3% on a reported basis. Single-use sphere lens’ revenues totaled $165.4 million.

Toric (33% of CVI) revenues amounted to $206.3 million, up 15% at cc and 11% on a reported basis. Multifocal (12% of CVI) generated revenues of $74.1 million, up 15% at cc and 12% on a reported basis.

Non-single-use sphere lens’ (26% of CVI) revenues totaled $143.5 million, up 2% on a reported basis and 5% organically from the year-ago quarter.

Geographically, the segment witnessed a revenue improvement of $243.3 million in the Americas (42% of CVI), up 9% on a reported basis and at cc. EMEA revenues (37% of CVI) amounted to $210 million, up 2% year over year and 6% at cc.

Asia Pacific sales (21% of CVI) gained 9% year over year to $136 million. The figure was up 19% at cc.

CooperSurgical:The segment reported revenues of $288.1 million, up 6% at cc and 4% on a year-over-year basis.Organically, sales were up 5%.

Sub-segment Office and Surgical products (60% of CSI) generated $163 million in revenues, up 1% at cc as well as on a year-over-year basis. Fertility (40% of CSI) revenues totaled $125.1 million, up 1% year over year and at cc.

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

 

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

Margin Analysis

The gross profit amounted to $582.9 million, up 9.5% year over year. The adjusted gross margin was 67% of net revenues, flat year over year.

Meanwhile, selling, general and administrative expenses increased 26.4% to $407.5 million. Research and development expenses rose 24% year over year to $32.6 million.

The operating income in the quarter totaled $96.3 million, down 27.3% year over year. The adjusted operating margin was 23%, down 300 basis points from the prior-year quarter.

Financial Position

COO exited the fiscal second quarter of 2023 with cash and cash equivalents of $111.9 million, down from $118.2 million at the end of the fiscal first quarter. Net cash provided by operating activities totaled $166.6 million.

Fiscal 2023 Guidance

Cooper Companies updated its financial guidance for fiscal 2023. It is to be noted that the outlook does not include the Cook Medical Reproductive Health buyout, announced on Feb 7, 2022, due to pending regulatory approval.

The company now projects total revenues in the range of $3.512-$3.569 billion, indicating organic growth of 7-9% from the previous guidance of $3.496-$3.553 billion (6-8% growth). The Zacks Consensus Estimate for the same is currently pegged at $3.48 billion.

CVI revenues are estimated in the $2.365-$2.4 billion range (organic growth of 8-10%) compared with the previous guidance of $2.352-$2.388 billion (organic growth of 8-9%). CSI revenues are projected in the band of $1.147-$1.169 billion, implying organic growth of 5-7% from the previously guided range of $1.144-$1.166 billion.

Adjusted EPS is anticipated in the band of $12.66-$12.96, up from the previous guidance of $12.60-$12.90. The Zacks Consensus Estimate for the same is pegged at $12.47.

Peer Performance

Some other stocks in the medical space that have announced quarterly results are West Pharmaceutical Services WST, DENTSPLY SIRONA Inc. XRAY and CONMED Corporation CNMD.

West Pharmaceutical Services (WST) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company reported fiscal second-quarter 2023 adjusted EPS of $3.50, which beat the Zacks Consensus Estimate by 6.4%. Revenues of $63.46 billion outpaced the consensus mark by 4.4%.

West Pharmaceutical Services has a long-term estimated growth rate of 6.3%. WST’s earnings surpassed estimates in three of the trailing four quarters and missing in one, the average surprise being 13.61%.

DENTSPLY SIRONA carries a Zacks Rank #2 at present. The company reported fiscal first-quarter 2023 adjusted EPS of 39 cents, which beat the Zacks Consensus Estimate by 10%. Revenues of $978 million outpaced the consensus mark by 5.1%.

DENTSPLY SIRONA has a long-term estimated growth rate of 9.1%. XRAY’s four-quarter average earnings  surprise was 10.47%.

CONMED Corp currently carries a Zacks Rank #2. The company recorded first-quarter 2023 adjusted earnings of 66 cents per share, which outpaced the Zacks Consensus Estimate by 18.9%. Revenues of $295.5 million beat the Zacks Consensus Estimate by 10.5%.

CONMED Corp has a long-term estimated growth rate of 19.4%. CNMD’s earnings surpassed estimates in two of the trailing four quarters, missed once and met once, the negative average surprise being 10.54%.

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