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Bio-Rad (BIO) Q4 Earnings Miss Estimates, Operating Margin Up
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Bio-Rad Laboratories, Inc. (BIO - Free Report) posted fourth-quarter 2022 adjusted earnings per share (EPS) of $3.31, which missed the Zacks Consensus Estimate by 4.1%. However, the bottom line improved 1.5% from the prior-year quarter.
The quarter’s adjustments eliminate the impacts of certain non-recurring items like amortization of purchased intangibles, (gains) losses from the change in the fair market value of equity securities and loan receivable, losses on equity-method investments and others.
The GAAP EPS of the company was $27.78 per share in the fourth quarter against a GAAP loss of $52.54 in the year-ago quarter.
Full-year adjusted EPS was $14.42, a 9.5% plunge from the end of 2021. The metric, however, beat the Zacks Consensus Estimate by 0.3%.
Revenues in Detail
Revenues of $730.3 million in the quarter missed the Zacks Consensus Estimate by 2.9%. Revenues declined 0.3% from the year-ago quarter (up 5.8% at the constant exchange rate or CER). The company reported COVID-related revenues of $13 million, a significant decline from $46 million reported a year ago.
Full-year revenues were $2.80 billion, reflecting a 4.1% decline from the comparable 2021 period. The metric missed the Zacks Consensus Estimate by 0.7%.
Segmental Analysis
Sales at the Life Science segment in the fourth quarter totaled $359.7 million, up 10.1% year over year and 16.4% at CER. The sales decline was primarily due to lower COVID-related sales.Excluding COVID-related sales, Life Science revenues increased 28.1%, primarily driven by Droplet Digital PCR, process chromatography, Western blotting, and qPCR products.
Bio-Rad Laboratories, Inc. Price, Consensus and EPS Surprise
Net sales at the Clinical Diagnostics segment totaled $369.6 million, down 8.7% on a year-over-year basis and 2.9% at CER. Apart from the COVID-related sales decline, the decrease was primarily due to continuing supply chain constraints, which impacted instrument placements and sales of related consumables.
Margins
In the quarter under review, Bio-Rad’s gross profit fell 0.7% to $397.1 million. Gross margin contracted 20 basis points (bps) to 54.4%.
Operating expenses were $278.4 million in the fourth quarter, down 4.3% year over year. Operating profit totaled $118.7 million, reflecting an 8.9% rise from the prior-year quarter. The operating margin in the fourth quarter expanded 139 bps to 16.2%.
Financial Update
Bio-Rad exited the year 2022 with cash and cash equivalents (including short-term investments) of 1.79 billion compared with $875.5 million at the end of 2021. Total debt (including current maturities) at the end of 2022 was $1.19 billion compared with $11 million at the end of 2021.
Cumulative net cash flow from operating activities at the end of fourth-quarter 2022 was $194.4 million compared with the year-ago figure of $669.5 million.
2023 Guidance
Bio-Rad provided its guidance for full-year 2023.
The company anticipates currency-neutral revenue growth to be between 6% and 7%. Starting in 2023, Bio-Rad does not anticipate breaking out COVID-related sales, with its contribution becoming immaterial to the overall revenue base. When excluding the 2022 COVID-related sales, the company estimates currency-neutral revenue growth in 2023 to be between 10% and 11%.The Zacks Consensus Estimate for revenues is pegged at $2.86 billion.
The adjusted operating margin projection for the full year is 19.5%.
Our Take
Bio-Rad exited 2022 with lower-than-expected earnings and revenues. The fourth-quarter decline in revenues was mainly the result of lower COVID-related sales compared with the year-ago period as well as continuing supply chain constraints.
On a positive note, on a geographic basis, the company experienced double-digit currency-neutral year-over-year core revenue growth in the Americas and Asia, while Europe posted a more modest increase, primarily reflecting ongoing supply chain constraints for diagnostic products.
Zacks Rank and Key Picks
Bio-Rad currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, currently carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, with a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. The company currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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Bio-Rad (BIO) Q4 Earnings Miss Estimates, Operating Margin Up
Bio-Rad Laboratories, Inc. (BIO - Free Report) posted fourth-quarter 2022 adjusted earnings per share (EPS) of $3.31, which missed the Zacks Consensus Estimate by 4.1%. However, the bottom line improved 1.5% from the prior-year quarter.
The quarter’s adjustments eliminate the impacts of certain non-recurring items like amortization of purchased intangibles, (gains) losses from the change in the fair market value of equity securities and loan receivable, losses on equity-method investments and others.
The GAAP EPS of the company was $27.78 per share in the fourth quarter against a GAAP loss of $52.54 in the year-ago quarter.
Full-year adjusted EPS was $14.42, a 9.5% plunge from the end of 2021. The metric, however, beat the Zacks Consensus Estimate by 0.3%.
Revenues in Detail
Revenues of $730.3 million in the quarter missed the Zacks Consensus Estimate by 2.9%. Revenues declined 0.3% from the year-ago quarter (up 5.8% at the constant exchange rate or CER). The company reported COVID-related revenues of $13 million, a significant decline from $46 million reported a year ago.
Full-year revenues were $2.80 billion, reflecting a 4.1% decline from the comparable 2021 period. The metric missed the Zacks Consensus Estimate by 0.7%.
Segmental Analysis
Sales at the Life Science segment in the fourth quarter totaled $359.7 million, up 10.1% year over year and 16.4% at CER. The sales decline was primarily due to lower COVID-related sales.Excluding COVID-related sales, Life Science revenues increased 28.1%, primarily driven by Droplet Digital PCR, process chromatography, Western blotting, and qPCR products.
Bio-Rad Laboratories, Inc. Price, Consensus and EPS Surprise
Bio-Rad Laboratories, Inc. price-consensus-eps-surprise-chart | Bio-Rad Laboratories, Inc. Quote
Net sales at the Clinical Diagnostics segment totaled $369.6 million, down 8.7% on a year-over-year basis and 2.9% at CER. Apart from the COVID-related sales decline, the decrease was primarily due to continuing supply chain constraints, which impacted instrument placements and sales of related consumables.
Margins
In the quarter under review, Bio-Rad’s gross profit fell 0.7% to $397.1 million. Gross margin contracted 20 basis points (bps) to 54.4%.
Operating expenses were $278.4 million in the fourth quarter, down 4.3% year over year. Operating profit totaled $118.7 million, reflecting an 8.9% rise from the prior-year quarter. The operating margin in the fourth quarter expanded 139 bps to 16.2%.
Financial Update
Bio-Rad exited the year 2022 with cash and cash equivalents (including short-term investments) of 1.79 billion compared with $875.5 million at the end of 2021. Total debt (including current maturities) at the end of 2022 was $1.19 billion compared with $11 million at the end of 2021.
Cumulative net cash flow from operating activities at the end of fourth-quarter 2022 was $194.4 million compared with the year-ago figure of $669.5 million.
2023 Guidance
Bio-Rad provided its guidance for full-year 2023.
The company anticipates currency-neutral revenue growth to be between 6% and 7%. Starting in 2023, Bio-Rad does not anticipate breaking out COVID-related sales, with its contribution becoming immaterial to the overall revenue base. When excluding the 2022 COVID-related sales, the company estimates currency-neutral revenue growth in 2023 to be between 10% and 11%.The Zacks Consensus Estimate for revenues is pegged at $2.86 billion.
The adjusted operating margin projection for the full year is 19.5%.
Our Take
Bio-Rad exited 2022 with lower-than-expected earnings and revenues. The fourth-quarter decline in revenues was mainly the result of lower COVID-related sales compared with the year-ago period as well as continuing supply chain constraints.
On a positive note, on a geographic basis, the company experienced double-digit currency-neutral year-over-year core revenue growth in the Americas and Asia, while Europe posted a more modest increase, primarily reflecting ongoing supply chain constraints for diagnostic products.
Zacks Rank and Key Picks
Bio-Rad currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. (CAH - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Cardinal Health, currently carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, with a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. The company currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.