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Pacific Biosciences (PACB) Down 10.8% Despite Narrower Q1 Loss

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Pacific Biosciences of California, Inc.’s (PACB - Free Report) shares have declined 10.8% on Apr 30 following its first-quarter 2021 earnings release.

The company reported first-quarter 2021 adjusted loss per share of 18 cents, wider than the year-ago quarter’s adjusted  loss of 16 cents. However, the bottom line is narrower than the Zacks Consensus Estimate of a loss of 45 cents per share.

Revenues

For the quarter, revenues totaled $28.9 million, which missed the Zacks Consensus Estimate by a marginal 1.7%. However, the figure rose 86% from the year-ago quarter’s tally.

Segmental Analysis

Product Revenues amounted to $25.3 million, up 105.7% from the prior-year quarter.

Service and Other Revenues came in at $3.7 million, up 12.1% year over year.

Margins

Gross profit in the first quarter was $12.9 million, up 13.8% year over year. Gross margin was 44.8% of total revenues, expanding 274 basis points.

Operating expenses totaled $46.7 million, up 31.9% year over year.

Operating loss came in at $33.7 million, wider than the year-ago quarter’s loss of $23.9 million.

 

 

Cash Position

The company exited the first quarter of 2021 with cash, cash equivalents and investments excluding restricted cash of $1.16 billion compared with $318.8 million at the end of the fourth quarter of 2020.

Our Take

Pacific Biosciences ended the first quarter of 2021 on a mixed note. Nonetheless, the company saw an increase in both its Product, and Service and other revenues during the quarter. It continues to gain from its flagship Sequel system. It also deployed Sequel IIe systems in the quarter at LabCorp to scale up their capabilities of sequencing SARS-CoV-2.

The recent launch of the Sequel IIe System and collaboration with Asuragen continue to buoy optimism on the stock. It recently inked a multi-year collaboration deal with Invitae Corporation to start developing a production-scale high-throughput sequencing platform, utilizing the power of its highly accurate HiFi sequencing for widening the scope of Invitae’s whole genome testing capabilities. Gross margin expansion was another plus.

However, Pacific Biosciences saw a year-over-year wider operating loss in the quarter.

Zacks Rank and Key Picks

Pacific Biosciences currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Boston Scientific Corporation (BSX - Free Report) , Merit Medical Systems (MMSI - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific posted adjusted earnings per share (EPS) of 37 cents for the first quarter of 2021, which exceeded the Zacks Consensus Estimate by 23.3%. Revenues of $2.75 billion in the first quarter also exceeded the Zacks Consensus Estimate by 5.3%.

Merit Medical’s first-quarter 2021 adjusted EPS of 52 cents beat the Zacks Consensus Estimate of 37 cents by 40.5%. For the quarter, the company reported worldwide revenues of $248.9 million, which also surpassed the Zacks Consensus Estimate by 7.7%.

HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion too exceeded the Zacks Consensus Estimate by 2.2%.

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