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Bruker (BRKR) Down 0.2% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Bruker (BRKR - Free Report) . Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bruker due for a breakout? 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 Q4 Earnings Surpass Estimates, Margins Rise
Bruker delivered adjusted earnings per share of 58 cents in the fourth quarter of 2020, up 9.4% year over year. However, the figure surpassed the Zacks Consensus Estimate by 1.8%.
The adjustments include expenses related to purchased intangible amortization, income tax rate differential and restructuring costs.
GAAP earnings per share for the quarter were 45 cents a share, a penny ahead of the year-earlier figure.
A full-year adjusted earnings per share was $1.35, reflecting a 14% decline from the year-earlier figure. The metric surpassed the Zacks Consensus Estimate by 0.8%.
Revenues in Detail
Bruker registered revenues of $627.5 million in the fourth quarter, up 4.6% year over year. However, the figure surpassed the Zacks Consensus Estimate by 0.43%.
Excluding positive impact of 0.4% from acquisitions and 4.6% from changes in foreign currency rates, the company saw organic revenue decline of 0.4%.
The fall in organic revenues resulted from softer global instrumentation demand from the academic and industrial customers along with lower demand for BEST superconductors during the pandemic and economic slowdown.
Geographically, the United States witnessed a 17.7% decline in revenues in the reported quarter. Also, the other category’s revenues declined 19%. However, Europe revenues rose 24.4% year over year, with revenues in the Asia Pacific edging up 4.9%.
Full-year revenues were $1.99 billion, reflecting a 4.1% decrease from the year-ago period. Revenues beat the Zacks Consensus Estimate by 1%.
Segments in Detail
Bruker reports results under three segments — BSI Life Science (comprising BioSpin and CALID), BSI Nano and BEST.
In the fourth quarter, BioSpin Group revenues improved 1.5% from the year-ago quarter to $201.9 million on customer acceptance of an additional 1.2 gigahertz NMR system, ending with three 1.2 gigahertz NMR system accepted in 2020. BioSpin scientific software revenues were substantially higher, although from a modest pace during the quarter under review.
CALID revenues were up 18.6% year over year to $209.4 million, primarily resulting from continued growth in Daltonics microbiology and infectious disease diagnostics, and Life Science mass spectrometry businesses. CALID's microbiology and infectious disease consumables, which include the MALDI Biotyper Consumables and Bruker high molecular diagnostic consumables and timsTOF proteomics revenues, recorded significant growth year over year. Further, Bruker’s high-end diagnostics business gained from strength in Polymerase Chain Reaction (“PCR”) products, mainly in Europe.
Total BSI Life Science revenues were $411.3 million, up 9.5% year over year.
Revenues in the Nano group fell 4.4% to $163.4 million due to lower demand from academic, industrial and industrial research customers.
Organic revenues at the BSI segment (including BSI Life Science and BSI Nano Segments) increased 10% year over year.
In the fourth quarter, the company’s BEST segment revenues were $54.7 million, indicating a fall of 5.2% year over year, resulting from lower demand for superconductors by MRI companies.
Organically, BEST segment revenues declined 20.3% year over year, net of intercompany eliminations. At CER, the segment revenues fell 17%.
Margin Trend
In the quarter under review, Bruker’s gross profit rose 5.6% to $313 million. Gross margin expanded 49 basis points (bps) to 49.9%.
Meanwhile, selling, general & administrative expenses rose 0.08% to $130.4 million. Research and development expenses went up 22.3% year over year to $57.1 million. Adjusted operating expenses of $187.5 million increased 5.9% year over year.
Adjusted operating profit totaled $125.5 million, reflecting a 5.2% uptick from the prior-year quarter. Further, adjusted operating margin in the fourth quarter expanded 11 bps to 20%.
Financial Positions
Bruker exited 2020 with cash and cash equivalents, and short-term investments of $731.8 million compared with $684.9 million at the end of 2019. Long-term debt (including current portion) at the end of 2020 was $844.5 million compared with $813.3 million at the end of 2019.
Cumulative net cash flow from operating activities at the end of the fourth quarter was $333.2 million compared with $213.4 million a year ago.
The company incurred expenses of $24.6 million as payment of dividends to common stockholders and repurchased $123.2 million worth of stocks for 2020. As of Dec 31, Bruker had $34.5 million remaining under its existing share repurchase authorization.
2021 Guidance
Bruker has provided 2021 outlook considering market stabilization.
For fiscal 2021, Bruker expects revenue growth in the range of 11% to 13%, which includes revenue growth in the band of 7% to 9% on an organic basis and foreign currency revenue growth of 4%. The Zacks Consensus Estimate for the same is pegged at $2.15 billion.
The company expects full-year adjusted earnings per share in the band of $1.72-$1.77, calling for an increase of between 27% and 31% compared to 2020. The Zacks Consensus Estimate for the same is pegged at $1.73.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Bruker has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Bruker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Bruker (BRKR) Down 0.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Bruker (BRKR - Free Report) . Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bruker due for a breakout? 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 Q4 Earnings Surpass Estimates, Margins Rise
Bruker delivered adjusted earnings per share of 58 cents in the fourth quarter of 2020, up 9.4% year over year. However, the figure surpassed the Zacks Consensus Estimate by 1.8%.
The adjustments include expenses related to purchased intangible amortization, income tax rate differential and restructuring costs.
GAAP earnings per share for the quarter were 45 cents a share, a penny ahead of the year-earlier figure.
A full-year adjusted earnings per share was $1.35, reflecting a 14% decline from the year-earlier figure. The metric surpassed the Zacks Consensus Estimate by 0.8%.
Revenues in Detail
Bruker registered revenues of $627.5 million in the fourth quarter, up 4.6% year over year. However, the figure surpassed the Zacks Consensus Estimate by 0.43%.
Excluding positive impact of 0.4% from acquisitions and 4.6% from changes in foreign currency rates, the company saw organic revenue decline of 0.4%.
The fall in organic revenues resulted from softer global instrumentation demand from the academic and industrial customers along with lower demand for BEST superconductors during the pandemic and economic slowdown.
Geographically, the United States witnessed a 17.7% decline in revenues in the reported quarter. Also, the other category’s revenues declined 19%. However, Europe revenues rose 24.4% year over year, with revenues in the Asia Pacific edging up 4.9%.
Full-year revenues were $1.99 billion, reflecting a 4.1% decrease from the year-ago period. Revenues beat the Zacks Consensus Estimate by 1%.
Segments in Detail
Bruker reports results under three segments — BSI Life Science (comprising BioSpin and CALID), BSI Nano and BEST.
In the fourth quarter, BioSpin Group revenues improved 1.5% from the year-ago quarter to $201.9 million on customer acceptance of an additional 1.2 gigahertz NMR system, ending with three 1.2 gigahertz NMR system accepted in 2020. BioSpin scientific software revenues were substantially higher, although from a modest pace during the quarter under review.
CALID revenues were up 18.6% year over year to $209.4 million, primarily resulting from continued growth in Daltonics microbiology and infectious disease diagnostics, and Life Science mass spectrometry businesses. CALID's microbiology and infectious disease consumables, which include the MALDI Biotyper Consumables and Bruker high molecular diagnostic consumables and timsTOF proteomics revenues, recorded significant growth year over year. Further, Bruker’s high-end diagnostics business gained from strength in Polymerase Chain Reaction (“PCR”) products, mainly in Europe.
Total BSI Life Science revenues were $411.3 million, up 9.5% year over year.
Revenues in the Nano group fell 4.4% to $163.4 million due to lower demand from academic, industrial and industrial research customers.
Organic revenues at the BSI segment (including BSI Life Science and BSI Nano Segments) increased 10% year over year.
In the fourth quarter, the company’s BEST segment revenues were $54.7 million, indicating a fall of 5.2% year over year, resulting from lower demand for superconductors by MRI companies.
Organically, BEST segment revenues declined 20.3% year over year, net of intercompany eliminations. At CER, the segment revenues fell 17%.
Margin Trend
In the quarter under review, Bruker’s gross profit rose 5.6% to $313 million. Gross margin expanded 49 basis points (bps) to 49.9%.
Meanwhile, selling, general & administrative expenses rose 0.08% to $130.4 million. Research and development expenses went up 22.3% year over year to $57.1 million. Adjusted operating expenses of $187.5 million increased 5.9% year over year.
Adjusted operating profit totaled $125.5 million, reflecting a 5.2% uptick from the prior-year quarter. Further, adjusted operating margin in the fourth quarter expanded 11 bps to 20%.
Financial Positions
Bruker exited 2020 with cash and cash equivalents, and short-term investments of $731.8 million compared with $684.9 million at the end of 2019. Long-term debt (including current portion) at the end of 2020 was $844.5 million compared with $813.3 million at the end of 2019.
Cumulative net cash flow from operating activities at the end of the fourth quarter was $333.2 million compared with $213.4 million a year ago.
The company incurred expenses of $24.6 million as payment of dividends to common stockholders and repurchased $123.2 million worth of stocks for 2020. As of Dec 31, Bruker had $34.5 million remaining under its existing share repurchase authorization.
2021 Guidance
Bruker has provided 2021 outlook considering market stabilization.
For fiscal 2021, Bruker expects revenue growth in the range of 11% to 13%, which includes revenue growth in the band of 7% to 9% on an organic basis and foreign currency revenue growth of 4%. The Zacks Consensus Estimate for the same is pegged at $2.15 billion.
The company expects full-year adjusted earnings per share in the band of $1.72-$1.77, calling for an increase of between 27% and 31% compared to 2020. The Zacks Consensus Estimate for the same is pegged at $1.73.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Bruker has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Bruker has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.