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The Cooper Companies (COO) Beats Earnings Estimates in Q2
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The Cooper Companies Inc. (COO - Free Report) reported adjusted earnings of $2.50 in second-quarter fiscal 2017, surpassing the Zacks Consensus Estimate by 25 cents and improving from $2.05 in the year-ago quarter. We believe that the upside was driven by robust revenue growth.
Revenues increased to $522.4 million from $483.8 million recorded in the prior-year quarter. This also came above the Zacks Consensus Estimate of $520 million.
Stock Performance
The price performance of the stock has been favorable over the last three months. Cooper Companies rose 12.79%, comparing favorably with the Zacks classified Medical - Dental Supplies sub-industry’s gain of almost 6.28%.
Cooper Companies, Inc. (The) Price, Consensus and EPS Surprise
The Cooper Companies has two business segments – CooperVision (CVI) and CooperSurgical (CSI).
CooperVision Segment: CVI revenues increased 4% to $408.5 million on a year-over-year basis.
Coming to the major growth catalysts within the CVI segment, robust performance by Toric (32% of CVI revenues), Multifocal (10% of CVI revenues) and Single-use sphere lenses (26% of CVI revenues) propelled solid growth.
Multifocal revenues rose 4% to $42.9 million, while Toric revenues increased 12% to $131.8 million on a year-over-year basis. Single-use sphere lenses sales climbed 10% to $104.1 million, while sales of non single-use sphere lenses climbed 2% to $129.7 million year over year.
Geographically, CVI revenues increased 4% in the Americas, while revenues from Asia Pacific surged 9% year over year.
CooperSurgical Segment: CSI revenues jumped 23% to $113.9 million on a year-over-year basis.
Coming to the CSI segment, the fertility category witnessed a 5% rise in sales in the reported quarter on a year-over-year basis, totaling $61.2 million. However, the office and surgical products category at the CSI segment rose only 1% to $52.7 million.
Margin Details
Adjusted gross margin in the reported quarter was 66.0% of revenues as compared with 63.2% registered in the year-ago quarter. The gross margin improvement was fueled by favorable product mix within the CooperVision segment, courtesy of the company’s flagship Biofinity product line.
Adjusted operating margin, as a percentage of revenues, was 26.8% in the fiscal second quarter compared with 24.3% recorded in the prior-year quarter. The major reason behind the upside is the acquisition of Wallace, a division of Smiths Group.
Guidance
For fiscal 2017, total revenue is expected in the band of $2,110–$2,135 million.
Revenues at the CVI segment are estimated between $1,645 million and $1,665 million, while CSI revenues are projected in the range of $465–$470 million.
Meanwhile, adjusted earnings are anticipated in the band of $9.50–$9.65 per share compared with the previously provided $9.10–$9.30 range.
Our Take
Cooper Companies continued to gain market traction, courtesy of innovative products like Biofinity and daily silicone hydrogel lenses, while CooperSurgical witnessed stellar growth in its fertility sub-segment.
Considering the outstanding performance of the stock, we expect The Cooper Companies to scale higher in the coming quarters. In this regard, positive long-term growth of 11.8% holds promise.
Zacks Rank & Key Picks
CooperVision currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector are Luminex Corp. , Inogen, Inc. (INGN - Free Report) and Edwards Lifesciences, Inc. (EW - Free Report) . Luminex and Inogen sport a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock roughly added 7.0% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 82%.
Edwards Lifesciences has an expected long-term adjusted earnings growth of almost 16% (last 3–5 years of actual earnings). The stock added roughly 14.8% over the last three months.
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The Cooper Companies (COO) Beats Earnings Estimates in Q2
The Cooper Companies Inc. (COO - Free Report) reported adjusted earnings of $2.50 in second-quarter fiscal 2017, surpassing the Zacks Consensus Estimate by 25 cents and improving from $2.05 in the year-ago quarter. We believe that the upside was driven by robust revenue growth.
Revenues increased to $522.4 million from $483.8 million recorded in the prior-year quarter. This also came above the Zacks Consensus Estimate of $520 million.
Stock Performance
The price performance of the stock has been favorable over the last three months. Cooper Companies rose 12.79%, comparing favorably with the Zacks classified Medical - Dental Supplies sub-industry’s gain of almost 6.28%.
Cooper Companies, Inc. (The) Price, Consensus and EPS Surprise
Cooper Companies, Inc. (The) Price, Consensus and EPS Surprise | Cooper Companies, Inc. (The) Quote
Revenue Segments
The Cooper Companies has two business segments – CooperVision (CVI) and CooperSurgical (CSI).
CooperVision Segment: CVI revenues increased 4% to $408.5 million on a year-over-year basis.
Coming to the major growth catalysts within the CVI segment, robust performance by Toric (32% of CVI revenues), Multifocal (10% of CVI revenues) and Single-use sphere lenses (26% of CVI revenues) propelled solid growth.
Multifocal revenues rose 4% to $42.9 million, while Toric revenues increased 12% to $131.8 million on a year-over-year basis. Single-use sphere lenses sales climbed 10% to $104.1 million, while sales of non single-use sphere lenses climbed 2% to $129.7 million year over year.
Geographically, CVI revenues increased 4% in the Americas, while revenues from Asia Pacific surged 9% year over year.
CooperSurgical Segment: CSI revenues jumped 23% to $113.9 million on a year-over-year basis.
Coming to the CSI segment, the fertility category witnessed a 5% rise in sales in the reported quarter on a year-over-year basis, totaling $61.2 million. However, the office and surgical products category at the CSI segment rose only 1% to $52.7 million.
Margin Details
Adjusted gross margin in the reported quarter was 66.0% of revenues as compared with 63.2% registered in the year-ago quarter. The gross margin improvement was fueled by favorable product mix within the CooperVision segment, courtesy of the company’s flagship Biofinity product line.
Adjusted operating margin, as a percentage of revenues, was 26.8% in the fiscal second quarter compared with 24.3% recorded in the prior-year quarter. The major reason behind the upside is the acquisition of Wallace, a division of Smiths Group.
Guidance
For fiscal 2017, total revenue is expected in the band of $2,110–$2,135 million.
Revenues at the CVI segment are estimated between $1,645 million and $1,665 million, while CSI revenues are projected in the range of $465–$470 million.
Meanwhile, adjusted earnings are anticipated in the band of $9.50–$9.65 per share compared with the previously provided $9.10–$9.30 range.
Our Take
Cooper Companies continued to gain market traction, courtesy of innovative products like Biofinity and daily silicone hydrogel lenses, while CooperSurgical witnessed stellar growth in its fertility sub-segment.
Considering the outstanding performance of the stock, we expect The Cooper Companies to scale higher in the coming quarters. In this regard, positive long-term growth of 11.8% holds promise.
Zacks Rank & Key Picks
CooperVision currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector are Luminex Corp. , Inogen, Inc. (INGN - Free Report) and Edwards Lifesciences, Inc. (EW - Free Report) . Luminex and Inogen sport a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock roughly added 7.0% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 82%.
Edwards Lifesciences has an expected long-term adjusted earnings growth of almost 16% (last 3–5 years of actual earnings). The stock added roughly 14.8% over the last three months.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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