The Cooper Companies Inc. Earnings: Margins Suffer as Costs Rise, Profit Falls

Rising costs hurt The Cooper Companies Inc. (NYSE:COO) in the third quarter as profit dropped from a year earlier. Cooper Companies, Inc. develops, manufactures and markets healthcare products, primarily medical devices through its two business units, CooperVision, Inc. and CooperSurgical, Inc.

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The Cooper Companies Earnings Cheat Sheet for the Third Quarter

Results: Net income for The Cooper Companies Inc. fell to $38.1 million (78 cents per share) vs. $39.7 million (86 cents per share) a year earlier. This is a decline of 4% from the year earlier quarter.

Revenue: Rose 18.9% to $351.4 million from the year earlier quarter.

Actual vs. Wall St. Expectations: COO reported adjusted net income of $1.15 per share. By that measure, the company beat the mean estimate of $1.08 per share. It beat the average revenue estimate of $331.8 million.

Quoting Management: Commenting on the results, Robert S. Weiss, Cooper’s president and chief executive officer said, “I am pleased to report another strong quarter for the Company. We gained market share within CVI, posted solid margins in CVI and CSI, generated strong EPS, delivered improving free cash flow and significantly paid down debt. We are very encouraged by our business trends and believe we are well positioned to deliver strong operating results for the remainder of fiscal 2011.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose more than sevenfold from the year earlier, while the figure increased more than twofold in the first quarter, 60% in the fourth quarter of the last fiscal year and 81.3% in the third quarter of the last fiscal year.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 9 cents in the second quarter, by 17 cents in the first quarter, and by 18 cents in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 12.5% to $325.3 million in the second quarter. The figure rose 12.7% in the first quarter from the year earlier and climbed 10.5% in the fourth quarter of the last fiscal year from the year-ago quarter.

Competitors to Watch: STAAR Surgical Company (NASDAQ:STAA), Teleflex Incorporated (NYSE:TFX), Utah Medical Products, Inc. (NASDAQ:UTMD), Atrion Corporation (NASDAQ:ATRI), Covidien plc (NYSE:COV), Shamir Optical Industry Ltd. (NASDAQ:SHMR), Novartis AG (NYSE:NVS), C.R. Bard, Inc. (NYSE:BCR), Johnson & Johnson (NYSE:JNJ), and Boston Scientific Corp. (NYSE:BSX).

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(Source: Xignite Financials)