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Why Is Bio-Rad (BIO) Down 13% Since Last Earnings Report?
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It has been about a month since the last earnings report for Bio-Rad Laboratories (BIO - Free Report) . Shares have lost about 13% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bio-Rad due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Bio-Rad posted fourth-quarter 2020 adjusted earnings per share of $4.01, which surpassed the Zacks Consensus Estimate by 29.4%. Moreover, the bottom line rose 72.8% from the prior-year quarter.
The quarter’s adjustments eliminate the impacts of certain non-recurring items like amortization of purchased intangibles, legal charges, restructuring costs and acquisition-related one-time benefits.
GAAP earnings per share of the company was $27.81 per share in the quarter, up from the year-ago quarter's earnings per share of $18.31, reflecting an uptick of 51.9%.
Full-year adjusted earnings per share was $10.52, reflecting a 49% increase from the year-ago period. Moreover, the metric surpassed the Zacks Consensus Estimate by 9.5%.
Full-year GAAP earnings per share was $126.20, reflecting a surge of 116.6% from the year-ago period.
Revenues in Detail
Bio-Rad’s revenues of $789.8 million in the quarter surpassed the Zacks Consensus Estimate by 15.9%. Moreover, revenues improved 26.5% from the year-ago quarter (up 24.4% at CER).
Per the company, fourth-quarter revenues were boosted by damages award related to intellectual property litigation with 10x Genomics amounting to $32 million. Further, strong demand for products associated with COVID-19 testing and related research were observed during the quarter.
Full-year revenues were $2.55 billion, reflecting a 10.1% increase (up 10.3% at CER) from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 4.5%.
Segmental Analysis
Sales at the Life Science segment in the fourth quarter totaled $428.5 million, up 77.1% year over year and 73.9% at CER. The growth at CER was primarily driven by sales of PCR product lines on the back of robust pandemic-led demand as well as strong performance in the biopharma segment. This segment also included the damages award related to intellectual property litigation. Other growth contributors were strength in ddPCR and Process Media products. Geographically, the company’s quarterly growth at CER was experienced by all regions.
Net sales at the Clinical Diagnostics segment totaled $359.6 million, down 5.1% on a year-over-year basis and 6.6% at CER. The downside at CER was driven by lower demand due to the pandemic and was across most product lines as well as all regions.
Margins
In the quarter under review, Bio-Rad’s gross profit rose 39.3% to $460.2 million. Gross margin expanded 534 basis points (bps) to 58.3%. Per the company, adjusted gross margin was 58.2%, expanding 150 bps.
Operating expenses were $284.9 million in the fourth quarter, up 5% year over year. Operating profit totaled $175.2 million, reflecting a stupendous upsurge of 195.9% from the prior-year quarter. Further, operating margin in the fourth quarter expanded 1271 bps to 22.2%.
Company-adjusted operating margin was 21.4%, expanding 710 bps year over year.
Financial Update
Bio-Rad exited the year with cash and cash equivalents (including short-term investments) of $9.9 million compared with $1.12 billion at the end of 2019. Total debt (including current maturities) at the end of 2020 was $14.1 million compared with $439.8 million.
Cumulative net cash flow from operating activities at the end of 2020 was $575.3 million compared with $457.9 million in the year-ago period.
2021 Guidance
Although Bio-Rad put up a strong performance in 2020 amid the gradual return to pre-pandemic activity levels and normalized business mix, the company continues to be uncertain about the duration and impact of the pandemic.
Bio-Rad expects full-year revenues to be up 4.5-5% at CER year over year. Further, the Life Science segment’s growth is expected to be flat as the company projects lower sales of pandemic-related products in 2021. However, the Clinical Diagnostics segment is likely to grow by 10-11% for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Bio-Rad has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Bio-Rad has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Bio-Rad (BIO) Down 13% Since Last Earnings Report?
It has been about a month since the last earnings report for Bio-Rad Laboratories (BIO - Free Report) . Shares have lost about 13% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Bio-Rad due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Bio-Rad Q4 Earnings Surpass Estimates, Margins Rise
Bio-Rad posted fourth-quarter 2020 adjusted earnings per share of $4.01, which surpassed the Zacks Consensus Estimate by 29.4%. Moreover, the bottom line rose 72.8% from the prior-year quarter.
The quarter’s adjustments eliminate the impacts of certain non-recurring items like amortization of purchased intangibles, legal charges, restructuring costs and acquisition-related one-time benefits.
GAAP earnings per share of the company was $27.81 per share in the quarter, up from the year-ago quarter's earnings per share of $18.31, reflecting an uptick of 51.9%.
Full-year adjusted earnings per share was $10.52, reflecting a 49% increase from the year-ago period. Moreover, the metric surpassed the Zacks Consensus Estimate by 9.5%.
Full-year GAAP earnings per share was $126.20, reflecting a surge of 116.6% from the year-ago period.
Revenues in Detail
Bio-Rad’s revenues of $789.8 million in the quarter surpassed the Zacks Consensus Estimate by 15.9%. Moreover, revenues improved 26.5% from the year-ago quarter (up 24.4% at CER).
Per the company, fourth-quarter revenues were boosted by damages award related to intellectual property litigation with 10x Genomics amounting to $32 million. Further, strong demand for products associated with COVID-19 testing and related research were observed during the quarter.
Full-year revenues were $2.55 billion, reflecting a 10.1% increase (up 10.3% at CER) from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 4.5%.
Segmental Analysis
Sales at the Life Science segment in the fourth quarter totaled $428.5 million, up 77.1% year over year and 73.9% at CER. The growth at CER was primarily driven by sales of PCR product lines on the back of robust pandemic-led demand as well as strong performance in the biopharma segment. This segment also included the damages award related to intellectual property litigation. Other growth contributors were strength in ddPCR and Process Media products. Geographically, the company’s quarterly growth at CER was experienced by all regions.
Net sales at the Clinical Diagnostics segment totaled $359.6 million, down 5.1% on a year-over-year basis and 6.6% at CER. The downside at CER was driven by lower demand due to the pandemic and was across most product lines as well as all regions.
Margins
In the quarter under review, Bio-Rad’s gross profit rose 39.3% to $460.2 million. Gross margin expanded 534 basis points (bps) to 58.3%. Per the company, adjusted gross margin was 58.2%, expanding 150 bps.
Operating expenses were $284.9 million in the fourth quarter, up 5% year over year. Operating profit totaled $175.2 million, reflecting a stupendous upsurge of 195.9% from the prior-year quarter. Further, operating margin in the fourth quarter expanded 1271 bps to 22.2%.
Company-adjusted operating margin was 21.4%, expanding 710 bps year over year.
Financial Update
Bio-Rad exited the year with cash and cash equivalents (including short-term investments) of $9.9 million compared with $1.12 billion at the end of 2019. Total debt (including current maturities) at the end of 2020 was $14.1 million compared with $439.8 million.
Cumulative net cash flow from operating activities at the end of 2020 was $575.3 million compared with $457.9 million in the year-ago period.
2021 Guidance
Although Bio-Rad put up a strong performance in 2020 amid the gradual return to pre-pandemic activity levels and normalized business mix, the company continues to be uncertain about the duration and impact of the pandemic.
Bio-Rad expects full-year revenues to be up 4.5-5% at CER year over year. Further, the Life Science segment’s growth is expected to be flat as the company projects lower sales of pandemic-related products in 2021. However, the Clinical Diagnostics segment is likely to grow by 10-11% for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Bio-Rad has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Bio-Rad has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.