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Will CooperVision Drive Cooper Companies’ (COO) Q4 Earnings?


The Cooper Companies Inc.’s COO fourth-quarter fiscal 2017 results, scheduled for release on Dec 7, are expected to show steady growth in CooperVision Segment or CVI — one of the major revenue components. While this could majorly drive fourth-quarter earnings, an expected improvement in revenues at other segments should help the company generate solid results.

It is important to note that Cooper’s last quarter earnings beat the Zacks Consensus Estimate by 2.3%. Similar to the prior quarter, strong growth in non single-use sphere lenses and single-use sphere lenses are expected to be the main factors driving CVI revenues.

The Zacks Consensus Estimate for CVI stands at $441 million for the fourth quarter. This reflects an increase of almost 7% from the year-ago quarter. Year-over-year growth across CooperSurgical or CSI and Fertility segments also hold promise for Cooper.

Delving deeper into the fundamentals of the stock, let’s see how things are shaping up prior to this release.

Key Factors to Influence Q4

View Upbeat: For the fourth quarter, Cooper expects revenues in the range of $552 million to $565 million. CVI revenues are expected between $435 million and $445 million, while CSI revenues are anticipated between $117 million and $120 million. The company expects adjusted earnings per share between $2.60 and $2.70.

Furthermore, the Zacks Consensus Estimate for earnings stands at $2.66 per share, up 16.6% year over year. The estimate for revenues is pegged at $559.1 million, up 7.8% year over year.

Cooper Companies, Inc. (The) Price and EPS Surprise

Robust CSI Product Portfolio: Cooper is well positioned to benefit from the expanding CSI product portfolio. The company's presence in the markets of Spain, the U.K., Japan, Peru, South America, the UAE, South Africa, Jordan and Taiwan is worth a mention. In an initiative to bolster its CSI portfolio, the company recently announced an asset-purchase agreement to acquire the flagship contraception platform of Israel-based Teva Pharmaceutical Industries (TEVA) — PARAGARD Intrauterine Device. The Zacks Consensus Estimate for CSI revenues stands at $118 million, up 10.3% year over year.

Fertility Segment to Drive Growth: We believe that strong performance in the fertility segment would drive Cooper’s top line. The company’s focus on genetic testing is also expected to continue to drive growth. The Zacks Consensus Estimate for the segment’s revenues stands at $64 million, up 23% year over year.

However, volatile foreign exchange is likely to hurt results in the quarter to be reported.

Our quantitative model projects an earnings beat for Cooper this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. This is the case here, as you will see below.

Zacks ESP: The Earnings ESP for Cooper is +0.82%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cooper currently carries a Zacks Rank #2, hinting at probabilities of a beat.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Zumiez Inc. ZUMZ has an Earnings ESP of +0.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters, Inc. AEO has an Earnings ESP of +1.04% and a Zacks Rank #2.

G-III Apparel Group, Ltd. GIII has an Earnings ESP of +1.44% and a Zacks Rank #3.

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