Johnson & Johnson (JNJ), Valeant Pharmaceuticals Intl Inc (VRX): Why The Cooper Companies, Inc. (COO) Earnings Could Look Healthier

The Cooper Companies, Inc. (NYSE:COO) will release its quarterly report on Thursday, and with the stock trading at all-time highs, investors are looking for strong results from the company. Despite some headwinds that have hurt other medical-device makers, The Cooper Companies, Inc. (NYSE:COO) earnings appear likely to grow both this quarter and well into the future.

The Cooper Companies, Inc.

The Cooper Companies, Inc. (NYSE:COO) has focused on two major segments for its success. On one hand, it makes vision-care products, with an emphasis on contact lenses. Yet Cooper also makes products to supply medical professionals specializing in obstetrics and gynecology, with the goal of improving health care delivery to women. Let’s take an early look at what’s been happening with The Cooper Companies, Inc. (NYSE:COO) over the past quarter and what we’re likely to see in its report.

Stats on Cooper

Analyst EPS Estimate $1.72
Change From Year-Ago EPS 18.6%
Revenue Estimate $410.54 million
Change From Year-Ago Revenue 8.6%
Earnings Beats in Past 4 Quarters 3

Source: Yahoo! Finance.

How far can Cooper earnings climb?
Analysts have gotten more optimistic about the prospects for Cooper earnings in recent months, boosting their July quarter estimates by a nickel per share and their full fiscal-year projections by more than triple that amount. The stock has continued its strong move upward, rising 17% since late May.

The Cooper Companies, Inc. (NYSE:COO) carried its positive momentum from last quarter, reporting solid results from its fiscal second quarter. Earnings climbed 36% on an 11% jump in revenue, with CEO Bob Weiss specifically referring to the company’s newly launched MyDay single-use contact lenses as an example of its success in delivering on its long-term goals. The company managed to increase its margins in part by cutting royalty payments on its silicone hydrogel lens sales, and Cooper also reduced its outstanding debt by more than a fifth during the quarter.

Part of The Cooper Companies, Inc. (NYSE:COO)’s success has come from identifying and delivering on customers’ wants and needs. In vision, sales of one-day contact lenses carry much higher profit margins than its monthly lenses. That’s consistent with the experience of health care giant Johnson & Johnson (NYSE:JNJ), which also specifically noted daily lenses as a growth opportunity for its worldwide vision-care business. Cooper recently got an analyst upgrade that cited continued strength in contact lens sales in projecting a favorable outcome for shareholders.