Bruker (BRKR) Q2 Earnings and Revenues Top, '23 Sales View Up
Bruker Corporation BRKR delivered adjusted earnings per share (EPS) of 50 cents in the second quarter of 2023, up 11.1% year over year. The figure exceeded the Zacks Consensus Estimate by 4.2%.
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 39 cents, reflecting an 18.2% rise from the year-earlier figure.
Revenues in Detail
Bruker registered revenues of $681.9 million in the second quarter, up 15.9% year over year. The figure topped the Zacks Consensus Estimate by 5.5%.
Excluding the positive impacts of 1.9% from acquisitions and 0.5% from changes in foreign currency rates, the company witnessed organic revenue growth of 13.5%.
On a geographic basis, the United States witnessed a 4.5% year-over-year rise in revenues in the reported quarter. This exceeded our model’s projection of a 0.7% improvement in the second quarter.
Bruker Corporation Price, Consensus and EPS Surprise
Bruker Corporation price-consensus-eps-surprise-chart | Bruker Corporation Quote
Europe revenues increased 12.7% year over year, whereas revenues in the Asia Pacific increased 26.5%. Our model projected second-quarter revenues in Europe and the Asia Pacific to improve 15.6% and 10%, respectively.
The Other category’s revenues moved up 32.2% year over year. Our model’s projected improvement was 16.7% in the second quarter.
Segmental Analysis
Bruker reports results under two segments — BSI (comprising BioSpin and CALID and Nano) and Bruker Energy & Supercon Technologies (“BEST”).
BSI
Within this segment, BioSpin Group’s revenues rose 1.4% from the year-ago quarter to $162 million. Our model’s projected revenues in this segment were $182 million.
CALID’s revenues increased 19.4% year over year to $227.2 million in the second quarter. This compares with our model’s projected revenues of $203.4 million in this segment.
Organic revenues grew in the mid-teens range, driven by the strong performance of proteomics and molecular spectroscopy.
Revenues of the Nano group climbed 23.5% to $225.1 million. Our model projected revenues for this segment to be $196.8 million.
Nano’s organic revenues grew in the low 20% range, driven by strength in Nano's industrial research and academic businesses.
BEST
In the second quarter, the BEST segment’s revenues were $72.7 million, up 22.8% year over year. This compares with our model’s segmental projection of $66.3 million.
Margin Trend
In the quarter under review, Bruker’s gross profit rose 14.2% to $340.5 million. The gross margin expanded 75 basis points (bps) to 49.9%.
SG&A expenses rose 16.9% to $177.9 million. R&D expenses went up 19.1% year over year to $71 million. Adjusted operating expenses of $248.9 million increased 17.5% year over year.
The adjusted operating profit totaled $91.6 million, reflecting a 6% rise from the prior-year quarter. Meanwhile, the adjusted operating margin in the second quarter contracted 125 bps to 13.4%.
Financial Position
Bruker exited the second quarter of 2023 with cash and cash equivalents of $574.8 million compared with $645.5 million as of Dec 31, 2022. The total long-term debt (including the current portion) at the end of the second quarter was $1.24 billion compared with $1.22 billion at the end of 2022.
At the second quarter-end, the cumulative net cash flow from operating activities was $13 million against the cumulative net cash outflow of $44.4 million in the year-ago period.
2023 Guidance
Bruker provided an updated outlook for 2023.
For the full year, the company expects revenues in the range of $2.85-$2.90 billion (previously $2.83-$2.88 billion).
This indicates year-over-year revenue growth of 12.5%-14.5% (earlier 12%-14%) on a reported basis and growth of 9.5%-11.5% (previously 9%-11%) on an organic basis. The Zacks Consensus Estimate for revenues is pegged at $2.86 billion.
BRKR expects its full-year 2023 adjusted EPS in the range of $2.55-$2.60 (or 9%-11% growth year over year), unchanged from the previously issued guidance. The Zacks Consensus Estimate for the same is pegged at $2.58 per share.
Our Take
Bruker ended the second quarter of 2023 with better-than-expected earnings and revenues. The company witnessed continued booking growth from academia, government, academic medical centers and contra retail industry trends. The strong demand for the company’s high-value scientific instruments and life science solutions buoys optimism. In addition, an updated revenue outlook for 2023 appears promising.
During the quarter, Bruker’s timsTOF platform saw robust demand for applications in 4D proteomics, anti-proteomics and metabolomics and more. The company continued to make investments in R&D and the commercial infrastructure in compelling Project Accelerate 2.0 opportunity areas while maintaining a disciplined cost management approach.
Meanwhile, the adjusted operating margin declined in the quarter, led by lower gross margins and continued Project Accelerate 2.0 investments, as well as partially transitory headwinds from foreign currency and acquisitions.
Zacks Rank & 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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