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Cooper Companies (COO) Q3 Earnings & Revenues Top Estimates

Zacks Equity Research
·5 mins read

The Cooper Companies, Inc. COO reported third-quarter fiscal 2020 adjusted earnings per share (EPS) of $2.28, which beat the Zacks Consensus Estimate of $1.58 by 44.3%. However, the bottom line declined 29.4% on a year-over-year basis.

Revenues of this Zacks Rank #3 (Hold) company came in at $578.2 million, surpassing the Zacks Consensus Estimate by 7.8%. However, the top line fell 14.9% from the year-ago quarter.

Fiscal Q3 Segment Details

CooperVision (CVI)

This segment’s revenues totaled $449.3 million, down 11% at constant currency (cc) and 12% on a reported basis.

Per management, the segment saw a noticeable decline in revenues from Single-use sphere lenses (28% of CVI), reflecting a decrease of 13% at cc and 14% on a reported basis. Single-use sphere lenses revenues totaled $126.5 million.

Toric (33% of CVI) revenues amounted to $147.6 million, down 9% both at cc and on a reported basis.

Multifocal (10% of CVI) generated revenues of $46.9 million, down 10% at cc and on reported basis.

Non single-use sphere (29% of CVI) revenues amounted to $128.3 million, down 12% at cc and 13% from the year-ago quarter.

The Cooper Companies, Inc. Price, Consensus and EPS Surprise

The Cooper Companies, Inc. Price, Consensus and EPS Surprise
The Cooper Companies, Inc. Price, Consensus and EPS Surprise

The Cooper Companies, Inc. price-consensus-eps-surprise-chart | The Cooper Companies, Inc. Quote

Geographically, the segment witnessed a deterioration in revenues in the Americas (39% of CVI), down 9% at cc and 10% year over year to $176.5 million.

EMEA revenues (37% of CVI) totaled $165.7 million, down 15% at cc and 15% from the prior-year quarter.

Asia Pacific sales (24% of CVI) declined 9% at cc and 9% year over year to $107.1 million.

CooperSurgical (CSI)

This segment posted revenues of $128.9 million, down 24% at cc and 24% on a year-over-year basis.

Sub-segment Office and Surgical products 63% of CSI) accounted for $81.7 million revenues, down 23% at cc and on a year-over-year basis.

Fertility (37% of CSI) revenues were $47.2 million, down 26% year over year and at cc.

Margin Analysis

In the fiscal third quarter, gross profit was $360.8 million, down 19.9% year over year.  Gross margin was 62.4% of net revenues, down 390 basis points (bps) year over year.

Operating income in the quarter totaled $72 million, which plunged 49.4% year over year. Operating margin was 12.5%, down 840 bps from the prior-year quarter.

Financial Position

The company exited the quarter with $127.4 million, up 59.6% on a sequential basis.

Fiscal Fourth-Quarter 2020 Guidance

The company projects total revenues between $665 million and $693 million. While CVI revenue is estimated in the range of $500-$520 million, CSI revenue is expected to be $165-$173 million.

Adjusted EPS is anticipated to range between $3 and $3.20.

Wrapping Up

Cooper Companies exited the fiscal third quarter on a strong note, wherein both earnings and revenues beat their respective consensus marks. However, the company witnessed weak performance across its core CVI and CSI units due to the impact of the COVID-19 pandemic. Also, the contraction in margins raises a concern. Moreover, the company’s top line declined on a year-over-year basis in the quarter. Non single-use sphere sales were soft, and CVI revenues declined in the Americas, EMEA and APAC.

Nonetheless, per management, the company witnessed faster than anticipated recovery and both of its businesses improved throughout the quarter and this momentum continued in August.

Also, management remains optimistic about the Clarity, MyDay and Biofinity suite of products. The company’s portfolio of daily silicone hydrogel lenses makes it one of the leaders in the soft contact lens market.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and West Pharmaceutical Services, Inc. WST. While both PerkinElmer and West Pharmaceuticals sport a Zacks Rank of 1 (Strong Buy), Thermo Fisher carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, which surpassed the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus mark by 6.9%.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion surpassed the consensus mark by 0.1%.

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