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Cooper Companies (COO) Q3 Earnings & Revenues Beat Estimates

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The Cooper Companies, Inc. COO reported third-quarter fiscal 2021 adjusted earnings per share (EPS) of $3.41, which beat the Zacks Consensus Estimate of $3.30 by 3.3%. The bottom line improved 49.6% on a year-over-year basis.

GAAP EPS in the fiscal third quarter was $12.37, reflecting a significant improvement from the year-ago EPS of $1.12.

Revenue Details

Revenues of this Zacks Rank #3 (Hold) company were $763.4 million in the quarter under review, surpassing the Zacks Consensus Estimate by 5.4%. On a year-over-year basis, the top line improved 32%, while it surged 28% at constant currency (cc).

Fiscal Q3 Segment Details

CooperVision (CVI)

The segment’s revenues totaled $557.5 million, up 20% at cc and 24% on a reported basis.

Per management, the segment saw an increase in revenues from Single-use sphere lenses (29% of CVI), reflecting an improvement of 2% at cc and 6% on a reported basis. Single-use sphere lenses revenues totaled $146 million.

Toric (32% of CVI) revenues amounted to $181 million, up 19% at cc and 23% on a reported basis.

Multifocal (11% of CVI) generated revenues of $61.6 million, up 26% at cc and 31% on a reported basis.

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

Non-single-use sphere (28% of CVI) revenues were $155.6 million, up 17% at cc and 21% from the year-ago quarter.

Geographically, the segment witnessed an improvement in revenues in the Americas (37% of CVI), up 17% on a reported basis and 16% at cc to $206.3 million.

EMEA revenues (40% of CVI) totaled $222.6 million, up 34% year over year and 24% at cc.

Asia Pacific sales (23% of CVI) improved 18% at cc and 20% year over year to $128.6 million.

CooperSurgical (CSI)

The segment reported revenues of $205.9 million, up 60% at cc and 58% on a year-over-year basis.

Sub-segment Office and Surgical products (59% of CSI) accounted for $122.5 million in revenues, up 50% at cc and on a year-over-year basis.

Fertility (41% of CSI) revenues were $83.4 million, up 77% year over year and 72% at cc.

Margin Analysis

In the fiscal third quarter, gross profit was $516.1 million, up 43% year over year. Gross margin was 67.6% of net revenues, up 520 basis points (bps) year over year.

Meanwhile, selling, general and administrative expenses rose 51.4% to $352.5 million. Research and development expenses increased 13.8% year over year to $24.8 million.

Operating income in the quarter totaled $100.6 million, which improved 39.7% year over year. Operating margin was 13.2%, up 70 bps from the prior-year quarter.

Financial Position

The company exited the third quarter of fiscal 2021 with cash and cash equivalents of $112.2 million, up from $105.9 million at the end of fiscal second-quarter.

Cumulative net cash provided by operating activities at the end of fiscal third quarter was $223.8 million compared with $112.8 million in the year-ago period.

Fiscal 2021 Guidance

Cooper Companies has updated its fiscal year 2021 guidance after taking into account the significant risk stemming from the resurgence in COVID-19 cases.

For fiscal 2021, the company projects total revenues between $2.89 billion and $2.92 billion, suggesting an improvement of 16-18% on a cc basis (up from the previously guided range of $2.86-$2.89 billion, indicating a rise of 14% to 15% on cc basis). The Zacks Consensus Estimate for the same is pegged at $2.87 billion.

CVI revenues are estimated to be $2.13-$2.15 billion, reflecting a rise of 12-13% at cc (up from the prior range of $2.11-$2.13 billion, indicating growth of 11-12% at cc).

CSI revenues are expected to be $766-$755 million, up 29-31% at cc (up from the previous projection of $745-$755 million with 25-27% growth at cc).

Adjusted EPS is anticipated between $13.20 and $13.40 (up from the previously guided range of $12.90 to $13.10). The Zacks Consensus Estimate for the same stands at $13.32.

Wrapping Up

Cooper Companies exited the fiscal third quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark. The company witnessed solid performance across its core CVI and CSI units during the quarter under review, along with robust geographical performances. Expansion in both gross and operating margins is positive. A raised financial outlook amidst continued pandemic-led challenges raises our optimism.

Per management, the company continues to witness success with its daily silicone hydrogel lenses that positions it as one of the leaders in the soft contact lens market. The company also remains optimistic about its myopia management program, which comprises MiSight and Ortho K lenses, and sustained strength in fertility.

However, increase in selling, general and administrative expenses is concerning.

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 Encompass Health Corporation EHC, West Pharmaceutical Services, Inc. WST and Bio-Rad Laboratories, Inc. BIO. While both Encompass Health and Bio-Rad Laboratories carry a Zacks Rank of 2 (Buy), West Pharmaceutical sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Encompass Health reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%.

Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million beat the Zacks Consensus Estimate by 17.3%.


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