The Cooper Companies Inc. (COO) reported second-quarter fiscal 2013 (ended Apr 30) adjusted earnings per share of $1.50 beating the Zacks Consensus Estimate of $1.37 and the year-ago earnings of $1.12 per share.
Profit soared 36.8% on a year-over-year basis to $75.1 million ($1.52 per share) in the fiscal second quarter.
Revenues
Cooper’s revenues in the fiscal second quarter increased 11% (up 15% in constant currency) year over year to $384 million, missing the Zacks Consensus Estimate of $390 million. Growth was led by robust sales of fertility offerings from CooperSurgical (CSI) and higher revenues from CooperVision (CVI).
Segment Analysis
Revenues from Cooper’s mainstay contact lens division (80.5% of company-wide revenues), CVI moved up 7% (up 11% in constant currency) year over year at $309.3 million. Sales were higher for all categories of lenses. Sales for the mainstay toric lenses increased 8% (up 10% in constant currency) to $96.7 million; multifocal lens sales surged 33% (up 34% in constant currency) to $29.7 million. Cooper’s revenues from single-use sphere lenses improved 2% (up 11% in constant currency) to $63.7 million while revenues from non single-use sphere lenses increased 5% (up 8% in constant currency) on a year-over-year basis to $119.2 million.
On a geographical basis, Cooper’s revenues from EMEA and Americas were up 8% and 12%, respectively in constant currency, and increased 13% in the Asia Pacific. On a material based analysis, sales of silicone hydrogel contact lenses were up sharply 31% in constant currency to $133.5 million while Proclear contact lens sales edged up 11% to $77.3 million.
The smaller women’s health segment (19.5% of company-wide revenues) CSI performed well with revenues soaring 32% year over year to $74.7 million. Cooper witnessed mixed contributions from operating units under its CSI segment. Surgical procedures revenues dropped 3% year over year to $21.3 million; revenues from fertility sub-division jumped 527% to $24.7 million whereas office sales decreased 6% to $28.7 million.
Margin Trends
Gross margin was 66.2% in the second quarter, higher than the 64% a year ago. Gross margin for CVI was 66.6% compared with 63.3% in the prior-year quarter. Operating margin was 21.2% in the reported quarter, up 220 basis points year over year on account of improved gross margin.
Selling, general and administrative expenditure increased 10% year over year to $151 million while research and development expenses moved up 11.2% to $14.5 million in the reported quarter.
Financial Health