Bruker (BRKR) Q3 Earnings and Revenues Top, '23 Sales View Up
Bruker Corporation BRKR delivered adjusted earnings per share (EPS) of 74 cents in the third quarter of 2023, up 12.1% year over year. The figure exceeded the Zacks Consensus Estimate by 17.5%.
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 60 cents, reflecting a 1.7% rise from the year-earlier figure.
Revenues in Detail
Bruker registered revenues of $742.8 million in the third quarter, up 16.3% year over year. The figure topped the Zacks Consensus Estimate by 3.3%.
Excluding the positive impacts of 2.1% from acquisitions and 3.3% from changes in foreign currency rates, the company witnessed organic revenue growth of 10.9%.
Bruker Corporation Price, Consensus and EPS Surprise
Bruker Corporation price-consensus-eps-surprise-chart | Bruker Corporation Quote
On a geographic basis, the United States witnessed a 10.1% year-over-year rise in revenues to $211.1 million. Our model projected the region’s revenues to be $191.1 million.
Europe revenues increased 23.8% year over year to $252 million, while revenues in the Asia Pacific rose 16.6% to $229.3 million. For both these regions, our model’s projected revenues for the third quarter were $247.3 million.
The Other category’s revenues moved up 7.7% year over year to $50.4 million. This exceeded our model’s projected revenues from this segment of $33.3 million.
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 12.9% from the year-ago quarter to $198.3 million. Our model’s projected revenues in this segment were $199.2 million.
CALID’s revenues increased 15.3% year over year to $239.3 million in the third quarter. This compares with our model’s projected revenues of $221.3 million in this segment.
Organic revenues grew in the high-single-digit percentage, driven by the strong performance of the microbiology business.
Revenues of the Nano group climbed 19.9% to $238.7 million. Our model projected revenues for this segment to be $228.9 million.
Nano’s organic revenues grew in the mid-teens-percentage range, driven by strength in Nano's industrial research, AI-driven semiconductor and advanced packaging metrology, as well as academic markets.
BEST
In the third quarter, the BEST segment’s revenues were $70.6 million, up 19.1% year over year. This compares with our model’s segmental projection of $73.7 million.
Margin Trend
In the quarter under review, Bruker’s gross profit rose 14.2% to $382.8 million. The gross margin contracted 95 basis points (bps) to 51.5%, on an 18.6% rise
SG&A expenses rose 22.7% to $177.6 million. R&D expenses went up 26.7% year over year to $71.3 million. Adjusted operating expenses of $248.9 million increased 23.8% year over year.
The adjusted operating profit totaled $133.9 million, reflecting a 0.3% fall from the prior-year quarter. Meanwhile, the adjusted operating margin in the third quarter contracted 299 bps to 18%.
Financial Position
Bruker exited the third quarter of 2023 with cash and cash equivalents of $363.6 million compared with $574.8 million at the second-quarter end. The total long-term debt (including the current portion) at the end of the third quarter was $1.10 billion, sequentially down from $1.24 billion at the end of the second quarter.
At the third quarter-end, the cumulative net cash flow from operating activities was $44.1 million compared with $69.5 million during last year’s comparable period.
2023 Guidance
Bruker provided an updated outlook for 2023.
For the full year, the company expects revenues in the range of $2.88-$2.91 billion (previously $2.85-$2.90 billion).
This indicates year-over-year revenue growth of 14%-15% (earlier 12.5%-14.5%) on a reported basis and growth of 11.5%-12.5% (previously 9.5%-11.5%) on an organic basis. The Zacks Consensus Estimate for revenues is pegged at $2.88 billion.
BRKR expects its full-year 2023 adjusted EPS in the range of $2.48-$2.53 (or 6%-8% growth year over year). Previously, the guidance for the metric was $2.55-$2.60, representing 9%-11% year-over-year growth. The Zacks Consensus Estimate is pegged at $2.55 per share.
Our Take
Bruker ended the third quarter of 2023 with earnings and revenues beating estimates. Year to date, the company has delivered three consecutive quarters of double-digit organic revenue growth and demonstrated great resiliency in challenging market conditions due to its innovation strategy.
Bruker’s strong growth is attributed to its fundamental commitment to innovations and delivering high-value solutions for customers and the ongoing portfolio transformation. BRKR recently completed the acquisition of PhenomeX, whose platforms are highly complementary to Bruker’s existing cellular and sub-cellular analysis tools, including the CellScape spatial biology platform. Also, the expansion of the gross margin is encouraging.
Meanwhile, the gross and adjusted operating margins resulted in a contraction in the quarter. Throughout fiscal 2023, Bruker continued to accelerate investments in its transformative Project Accelerate 2.0 initiatives, and operational excellence and productivity.
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 DexCom DXCM, Medpace MEDP and The Ensign Group ENSG.
DexCom, carrying a Zacks Rank of 2 (Buy), reported a third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million outpaced the consensus mark by 4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Medpace reported a third-quarter 2023 adjusted EPS of $2.22, beating the Zacks Consensus Estimate by 8.8%. Revenues of $492.5 million surpassed the Zacks Consensus Estimate by 3.4%. It currently carries a Zacks Rank #2.
Medpace has an estimated earnings growth rate of 16.2% for the next year. MEDP’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 14.6%.
The Ensign Group reported a third-quarter 2023 adjusted EPS of $1.20, beating the Zacks Consensus Estimate by 1.7%. Revenues of $940.8 million surpassed the Zacks Consensus Estimate by 0.2%. It currently carries a Zacks Rank #2.
The Ensign Group has a long-term estimated growth rate of 15%. ENSG’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 1.5%.
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