Cooper Companies ( COO ) reported second-quarter adjusted earnings of 96 cents per share on Thursday, up 14% year over year, beating the consensus of 93 cents.

The medical device company reported sales of $1.00 billion, beating the consensus of $995.35 million.

Sales were up 6% from last year’s second quarter, 7% in constant currency, 7% organically.

The CooperVision segment, focused on contact lenses, reported sales of $669.6 million, up 5% from last year’s second quarter, 7% in constant currency and 7% organically.

CooperSurgical, focused on fertility and women’s healthcare, reported revenue of $332.7 million, up 8% from last year’s second quarter, 9% in constant currency and 7% organically.

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The gross margin is 68% compared with 67% in last year’s second quarter, driven by efficiency gains and mix. On a non-GAAP basis, the gross margin was 68%, up from 67% last year.

Operating margin of 18% compared with 17% in last year’s second quarter, driven by stronger gross margins and targeted expense leverage. On a non-GAAP basis, the operating margin was 25%, up from 24% last year.

Guidance: Cooper Companies ( COO ) revised its fiscal 2025 revenue guidance from $4.08 billion-$4.16 billion to $4.11 billion-$4.15 billion versus a consensus of $4.12 billion.

The company expects 2025 organic growth of 5%-6%, down from 6%-8%.

CooperVision revenue of $2.76 billion-$2.79 billion (organic growth of 6% to 7%), compared to prior guidance of $2.73 billion-$2.79 billion (organic growth of 6.5% to 8.5%).

CooperSurgical revenue of $1.35 billion-$1.36 billion (organic growth of 3.5% to 4.5%) compared to prior guidance of $1.35 billion-$1.37 billion (organic growth of 4% to 6%).

Cooper Companies ( COO ) revised its fiscal 2025 adjusted earnings from $3.94-$4.02 to $4.05-$4.11, compared to the consensus of $3.99.

Analyst Reaction:

William Blair writes, “In short, while the market outlook commentary is disappointing and raises some new questions, we believe the company has sufficient tailwinds to drive continued earnings outperformance.”

Analyst Margaret Kaczor Andrew writes that despite the in-line quarter, management lowered market growth expectations by 100 basis points at the midpoint, which is now closer to historical pre-COVID growth levels. The change is due to softer channel inventory dynamics and industry-wide changes in overall purchasing patterns.

William Blair maintains an Outperform rating.

Wells Fargo maintains Cooper Companies ( COO ) with an Overweight, lowering the price target from $118 to $93.

JP Morgan downgrades Cooper Companies ( COO ) from Overweight to Neutral and lowers the price target from $110 to $76.

Price Action: COO stock was down 14.3% at $68.50 at the last check on Friday.

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