Cooper Industries Earnings Cheat Sheet: Five Straight Quarters of Double-Digit Growth

Cooper Industries plc. (NYSE:CBE) reported its results for the third quarter. Cooper Industries is a worldwide manufacturer of electrical products and tools.

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Cooper Industries plc Earnings Cheat Sheet for the Third Quarter

Results: Net income for Cooper Industries plc. rose to $160.2 million (98 cents per share) vs. $141.7 million (85 cents per share) in the same quarter a year earlier. This marks a rise of 13.1% from the year earlier quarter.

Revenue: Rose 12% to $1.39 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CBE beat the mean analyst estimate of 96 cents per share. Analysts were expecting revenue of $1.37 billion.

Quoting Management: “Our investments continued to gain momentum as we saw developing markets’ core revenue grow 14 percent. In addition, new product vitality, representing sales of products developed in the last three years, was a record 28% of total revenue. Our Company-wide strategic initiatives and proven business model have now delivered seven quarters of consecutive double-digit earnings per share growth, with the current quarter representing record earnings per share from continuing operations. Our longer cycle and international businesses continued to produce strong results in the face of macro uncertainty, while demand from non-residential and residential construction markets remains soft. Investments made over the last several years in new product development, targeted verticals, and our increased presence in emerging markets have continued to strengthen our growth profile,” said Cooper Industries Chairman and Chief Executive Officer Kirk S. Hachigian.

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than threefold and in the first quarter, the figure rose more than twofold.

Gross margin shrank 0.8 percentage point to 33%. The contraction appeared to be driven by increased costs, which rose 13.3% from the year earlier quarter while revenue rose 12%.

Revenue has risen the past four quarters. Revenue increased 2.4% to $1.37 billion in the second quarter. The figure rose 4% in the first quarter from the year earlier and climbed 0.3% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 96 cents versus a mean estimate of net income of 95 cents per share.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 95 cents per share, a drop from $1.01. At $3.79 per share, the average estimate for the fiscal year has fallen from $3.95 ninety days ago.

Competitors to Watch: Acuity Brands, Inc. (NYSE:AYI), TE Connectivity Ltd. (NYSE:TEL), Thomas & Betts Corporation (NYSE:TNB), Dover Corporation (NYSE:DOV), Orion Energy Systems, Inc. (NYSE:OESX), Danaher Corporation (NYSE:DHR), Nexxus Lighting, Inc. (NASDAQ:NEXS), and Littelfuse, Inc. (NASDAQ:LFUS).

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(Source: Xignite Financials)