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Why Is Bruker (BRKR) Down 3.1% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Bruker Corporation (BRKR - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it 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 catalysts.
Recent Earnings
Bruker reported adjusted earnings per share (EPS) of $0.46 in the fourth quarter of 2016, which exceeded the year-ago figure by 21.1%. Adjusted EPS was also way ahead of the Zacks Consensus Estimate of $0.37.
Excluding one-time adjustments, Bruker reported net income of $69.0 million or $0.43 per share in the fourth quarter, exhibiting year-over-year growth of 12.4% or 19.4%, respectively.
Full-year 2016 adjusted EPS was $1.19, up 33.7% from the year-ago period and also higher than the Zacks Consensus Estimate of $1.10 by 8.2%.
Revenues in Detail
Bruker reported revenues of $470.3 million in the fourth quarter, down 1.6% year over year. The top line, however, edged past the Zacks Consensus Estimate of $467 million. Excluding a 1.9% positive effect from Bruker-OST and Jordan Valley acquisitions and a 1.3% negative effect from changes in foreign currency rates, Bruker reported a year-over-year organic revenue decline of 2.2% in the fourth quarter of 2016.
Geographically and currency adjusted, European revenues declined in the low double digits year over year in the fourth quarter. North America declined in the low single digits. Asia was up low teens, including over 20% growth in China and low double-digit growth in the region. However, Japan recorded growth in the mid-single digits.
For full-year 2016, Bruker's net sales declined 0.8% to $1.61 billion, down from $1.62 billion in 2015. The figure was also in line with the Zacks Consensus Estimate. Excluding a 2.0% positive impact from acquisitions and a 0.5% negative effect from changes in foreign currency rates, Bruker's year-over-year organic revenue decline was 2.3% for 2016.
Margin Trend
Adjusted gross margin in the reported quarter expanded 264 basis points (bps) to 46.8%, owing to the company’s improvement in its BIOSPIN Group, Nano Surfaces and Daltonics product lines. However, these positives were marginally neutralized by academic and industrial market-driven volume declines observed in the fourth quarter.
Selling, general & administrative expenses decreased 2.8% to $100.1 million, while research and development expenses rose 4.1% to $38.2 million. Adjusted operating income increased 14.4% year over year to $82.1 million. The adjusted operating margin expanded 244 bps to 17.5% in the quarter.
Financial Position
Bruker exited fiscal 2016 with cash and cash equivalents and short-term investments of $500.3 million, up from $468.3 million in the prior year. Full-year net cash provided by operating activities was $154.5 million, up from $104.9 million a year ago.
Free cash flow was $93.7 million in 2016, compared with free cash flow of $195 million in the prior-year. This decline was primarily due to increased working capital.
During the reported quarter, Bruker repurchased an additional 734,000 shares at an average cost of $22.48 per share, totaling $16.5 million. Since the inception of the repurchase program on Dec 31, 2016, the company bought back 9.3 million shares for an average cost of $225 million, completing its Nov 2015 share repurchases authorization.
2017 Guidance
Bruker issued guidance for full-year 2017. Management currently expects reported revenue growth in the range of 1.5–2.5%, which includes organic revenue growth of 1–2% and growth from acquisitions of 3.5–4%. Changes in foreign currency rates are expected to have an adverse impact on reported revenues of 3% to 3.5%. The current Zacks Consensus Estimate for 2017 revenues stands at $1.65 billion.
The company also expects its 2017 adjusted operating margin to increase by approximately 40–70 bps year over year. This includes approximately 40 bps headwind in fiscal 2017 from its recent strategic acquisitions.
However, on the bottom-line front, Bruker anticipates adjusted EPS in the band of $1.05-$1.09. The current Zacks Consensus Estimate for 2017 EPS stands at $1.09, meeting the upper end of the company’s guidance.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Bruker's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'D'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% 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.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Bruker (BRKR) Down 3.1% Since the Last Earnings Report?
A month has gone by since the last earnings report for Bruker Corporation (BRKR - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it 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 catalysts.
Recent Earnings
Bruker reported adjusted earnings per share (EPS) of $0.46 in the fourth quarter of 2016, which exceeded the year-ago figure by 21.1%. Adjusted EPS was also way ahead of the Zacks Consensus Estimate of $0.37.
Excluding one-time adjustments, Bruker reported net income of $69.0 million or $0.43 per share in the fourth quarter, exhibiting year-over-year growth of 12.4% or 19.4%, respectively.
Full-year 2016 adjusted EPS was $1.19, up 33.7% from the year-ago period and also higher than the Zacks Consensus Estimate of $1.10 by 8.2%.
Revenues in Detail
Bruker reported revenues of $470.3 million in the fourth quarter, down 1.6% year over year. The top line, however, edged past the Zacks Consensus Estimate of $467 million. Excluding a 1.9% positive effect from Bruker-OST and Jordan Valley acquisitions and a 1.3% negative effect from changes in foreign currency rates, Bruker reported a year-over-year organic revenue decline of 2.2% in the fourth quarter of 2016.
Geographically and currency adjusted, European revenues declined in the low double digits year over year in the fourth quarter. North America declined in the low single digits. Asia was up low teens, including over 20% growth in China and low double-digit growth in the region. However, Japan recorded growth in the mid-single digits.
For full-year 2016, Bruker's net sales declined 0.8% to $1.61 billion, down from $1.62 billion in 2015. The figure was also in line with the Zacks Consensus Estimate. Excluding a 2.0% positive impact from acquisitions and a 0.5% negative effect from changes in foreign currency rates, Bruker's year-over-year organic revenue decline was 2.3% for 2016.
Margin Trend
Adjusted gross margin in the reported quarter expanded 264 basis points (bps) to 46.8%, owing to the company’s improvement in its BIOSPIN Group, Nano Surfaces and Daltonics product lines. However, these positives were marginally neutralized by academic and industrial market-driven volume declines observed in the fourth quarter.
Selling, general & administrative expenses decreased 2.8% to $100.1 million, while research and development expenses rose 4.1% to $38.2 million. Adjusted operating income increased 14.4% year over year to $82.1 million. The adjusted operating margin expanded 244 bps to 17.5% in the quarter.
Financial Position
Bruker exited fiscal 2016 with cash and cash equivalents and short-term investments of $500.3 million, up from $468.3 million in the prior year. Full-year net cash provided by operating activities was $154.5 million, up from $104.9 million a year ago.
Free cash flow was $93.7 million in 2016, compared with free cash flow of $195 million in the prior-year. This decline was primarily due to increased working capital.
During the reported quarter, Bruker repurchased an additional 734,000 shares at an average cost of $22.48 per share, totaling $16.5 million. Since the inception of the repurchase program on Dec 31, 2016, the company bought back 9.3 million shares for an average cost of $225 million, completing its Nov 2015 share repurchases authorization.
2017 Guidance
Bruker issued guidance for full-year 2017. Management currently expects reported revenue growth in the range of 1.5–2.5%, which includes organic revenue growth of 1–2% and growth from acquisitions of 3.5–4%. Changes in foreign currency rates are expected to have an adverse impact on reported revenues of 3% to 3.5%. The current Zacks Consensus Estimate for 2017 revenues stands at $1.65 billion.
The company also expects its 2017 adjusted operating margin to increase by approximately 40–70 bps year over year. This includes approximately 40 bps headwind in fiscal 2017 from its recent strategic acquisitions.
However, on the bottom-line front, Bruker anticipates adjusted EPS in the band of $1.05-$1.09. The current Zacks Consensus Estimate for 2017 EPS stands at $1.09, meeting the upper end of the company’s guidance.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Bruker Corporation Price and Consensus
Bruker Corporation Price and Consensus | Bruker Corporation Quote
VGM Scores
At this time, Bruker's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'D'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% 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.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.