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Bruker (BRKR) Q4 Earnings In Line, Margin Growth Strong


Bruker Corporation BRKR delivered adjusted earnings per share (EPS) of 54 cents in the fourth quarter of 2018, up 5.9% from the year-ago figure. Meanwhile, the metric came in line with the Zacks Consensus Estimate.

On a reported basis, earnings were 50 cents a share against the year-earlier loss of 2 cents. The number also matched the Zacks Consensus Estimate

Full-year adjusted EPS totaled $1.40, reflecting an increase of 15.7% from the prior-year period.

Revenues in Detail

Bruker registered revenues of $553.6 million in the fourth quarter, up 4.4% year over year. The top line also surpassed the Zacks Consensus Estimate of $544.5 million.

Excluding a positive effect of 3.2% from acquisitions and a 2.2% negative impact from changes in foreign currency rates, Bruker generated higher organic revenues of 3.4% year over year.

Bruker Corporation Price, Consensus and EPS Surprise

Bruker Corporation Price, Consensus and EPS Surprise | Bruker Corporation Quote

The company’s organic revenue growth was driven by the strength in Bruker Scientific Instruments (BSI) and BEST segments.

Geographically, the United States registered 19% growth in the reported quarter. Meanwhile, European revenues dipped 1.6% year over year. Asia Pacific revenues also slipped 0.2%. In Other category, the revenue uptick was 11.9%.

Bruker’s BioSpin Group revenues were 0.7% above the year-ago quarter’s level. Revenues in the NANO group rose 5.2%, fueled by a strong uptrend in academic research and industrial research markets. CALID revenues were up 4.5% year over year.

Margin Trend

Gross margin in the quarter under review expanded 98 basis points (bps) to 49.3%. While selling, general & administrative expenses climbed 4.8% to $117.3 million. Research and development expenses ascended 3.9% year over year to $44.8 million. Overall, adjusted operating margin grew 92 bps to 19.9%.

Financial Position

Bruker exited 2018 with cash and cash equivalents plus short-term investments of $322.4 million, down from $439.2 million at the end of 2017. Full-year operating cashflow was $239.7 million in comparison to $154.4 million in the year-ago period.

2019 Guidance

Bruker has provided a preliminary 2019 guidance. For the full year, the company projects approximately 6-7% revenue growth including nearly 4-5% of organic revenue rise and an estimated 2% headwind from adverse foreign currency translation. The company envisions a year-over-year expansion of 70-100 bps in adjusted operating margin.

For 2019, Bruker expects its adjusted EPS view in the range of $1.54-$1.58, up 10-13% from the previous year’s figure. The Zacks Consensus Estimate of $1.56 remains within this guided range.

Our Take

Bruker ended the fourth quarter on a mixed note with earnings on par with the Zacks Consensus Estimate while revenues, staying ahead of the mark. A strong year-over-year rise in organic revenues was encouraging. Additionally, the improvement in gross and operating margins buoys optimism. The company’s strategic acquisition activity has also been impressive. Further, we are upbeat about the company’s current focus on product development through higher R&D investment.

On the flip side, a competitive landscape and macroeconomic woes pose persistent challenges to the company.

Zacks Rank & Key Picks

Bruker carries a Zacks Rank #3 (Hold). A few better-ranked medical stocks that have reported quarterly results are Abbott Laboratories ABT, AngioDynamics Inc. ANGO and CONMED, Corp. CNMD.

Abbott reported fourth-quarter 2018 adjusted EPS of 81 cents, in line with the Zacks Consensus Estimate. Revenues of $7.77 billion were below the Zacks Consensus Estimate of $7.79 billion. The stock has a Zacks Rank #2 (Buy).

AngioDynamics’ second-quarter fiscal 2019 adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, beating the consensus estimate by 2.9%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CONMED’s fourth-quarter adjusted EPS of 73 cents met the Zacks Consensus Estimate. Revenues of $242.4 million topped the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

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