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Can Segmental Growth Aid Cooper Companies' (COO) Q1 Earnings?

Zacks Equity Research

The Cooper Companies’ COO first-quarter fiscal 2019 results are scheduled to release on Mar 5, after market close.

The company expects to gain from segmental growth in the quarter.

Fiscal Q4 Results at a Glance

In the last reported quarter, the company reported earnings of $2.87 per share, missing the Zacks Consensus Estimate by 3%. However, earnings increased 8.3% on a year-over-year basis.

The California-based specialty medical device company reported revenues worth $651.5 million, surpassing the Zacks Consensus Estimate of $645.8 million. On a year-over-year basis, revenues improved 16%.

Which Way Are Q1 Estimates Trending?

For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $618.5 million, reflecting year-over-year growth of 4.8%. The same for earnings is pegged at $2.50, showing a year-over-year decline of 10.4%.

The Cooper Companies, Inc. Price and EPS Surprise


The Cooper Companies, Inc. Price and EPS Surprise | The Cooper Companies, Inc. Quote

Factors at Play

Cooper Companies reports revenues through two major segments — CooperVision (CVI) and CooperSurgical (CSI).

CVI’s Toric and Multifocal lenses, which make Cooper Companies a stalwart in the soft contact lenses market, are expected to drive fiscal first-quarter results. Additionally, CSI’s Surgical and Fertility product portfolio can fuel growth.

Notably, in the last reported quarter, CVI accounted for 73.8% of net revenues. The segment’s revenues totaled $480.6 million, up 10% on a pro forma basis and 9% year over year.

Additionally, in the last reported quarter, CSI accounted for 26.2% of net sales. Revenues at the segment came in at $170.9 million, up 5% at pro forma and 40% year over year.

It is encouraging to note that for 2019, the company expects CVI revenues within $1,940 million and $1,980 million. The same from CSI are anticipated within $660-$680 million.

Cooper Companies expects fiscal 2019 revenues within $2,600-$2,660 million. The mid-point of $2,630 million lies below the Zacks Consensus Estimate of $2.64 billion.

The company also expects adjusted earnings per share between $11.30 and $11.70. The midpoint of $11.50 is below the Zacks Consensus Estimate of $11.55.

What Does Our Model Predict?

Our quantitative model indicates a positive earnings surprise for Cooper Companies. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. This is exactly the case here.

Earnings ESP: The Earnings ESP for Cooper Companies is +0.76%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cooper Companies carries a Zacks Rank #3.

Other Stocks With a Favorable Combination

Here are a few stocks, which per our model, also have the right combination of elements to post earnings beat this quarter:

AZUL SA AZUL has an Earnings ESP of 7.22% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cara Therapeutics, Inc. CARA has an Earnings ESP of 11.36% and a Zacks Rank #2.

Chico’s FAS, Inc. CHS has an Earnings ESP of 2.17% and a Zacks Rank #2.

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