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Bio-Rad (BIO) to Report Q3 Earnings: What's in the Cards?

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Bio-Rad Laboratories, Inc. (BIO - Free Report) is slated to report third-quarter fiscal 2021 results on Oct 28, after the closing bell.

In the last-reported quarter, the company’s earnings per share (EPS) of $3.54 surpassed the Zacks Consensus Estimate by 86.3%. Moreover, earnings beat the consensus estimate in the last four quarters. The trailing four-quarter average surprise is 71.56%.

Let's see how things are shaping up prior to the announcement.

Factors at Play

Life Science

Bio-Rad has witnessed a pronounced change in product demand across its portfolio through the pandemic, including a major shift toward COVID-19 testing and research-related products.

With the growing number of COVID-19 cases through the months of the third quarter and with pharmaceutical clients resuming research activities, Bio-Rad is expected to have gained significant momentum in its Life Science segment in the third quarter of fiscal year 2021. Robust sales of Bio-Rad’s core Polymerase Chain Reaction (PCR) and Droplet Digital PCR products (dPCR), and Process Media are likely to have maintained momentum in the third quarter as well.  These factors are expected to have made significant contributions to the top line.

Through the first half of 2021, the company witnessed strong demand for the Droplet Digital PCR platform in the biopharma market. During the July 2021 update, Bio-Rad noted that government funding toward public health labs is driving demand for ddPCR products. We believe these products have witnessed continued strong demand through the fiscal third quarter due to the resurgence of the new COVID-19 variant. These are likely to have contributed to revenue growth in the to-be-reported quarter.

Clinical Diagnostics

During the second-quarter earnings update, the company noted the recovery of market demand for non-COVID business, with diagnostics labs business returning to about 95% of pre-COVID levels. The company also witnessed recovery in routine testing and elective surgeries during the second quarter. Considering the gradual market recovery and increase in clinic visits, we expect this to have continued through the fiscal third quarter, thus adding to the top line.

BioRad Laboratories, Inc. Price and EPS Surprise

In June 2021, Bio-Rad teamed up with Seegene -- a global provider of multiplex molecular diagnostics. Seegene's diagnostic products have high sensitivity and specificity and are optimized to work with Bio-Rad's CFX Real-Time PCR Systems. The partnership with Seegene is intended to provide required diagnostic testing products to U.S. markets. We expect this partnership to have significantly contributed to the company’s top-line in the to-be-reported quarter.

In the same month, Bio-Rad launched PREvalence ddPCR SARS-CoV-2 Wastewater Quantification Kit to detect SARS-CoV-2 in a community’s wastewater. Other recent launches include molecular qPCR and ddPCR instruments and assays, antibody tests, quality controls, and ddPCR assays to detect SARS-CoV-2 variants of concern. We expect these launches to have witnessed strong market adoption in the third quarter on the back of the resurgence of the Delta variant, thus adding significantly to the top line.

Estimate Picture

For fiscal 2021, the Zacks Consensus Estimate for total revenues of $2.84 billion implies growth of 11.6% from the prior-year reported figure.

The consensus estimate for earnings per share is pegged at $14.20, indicating an improvement of 34.9% from the prior-year reported figure.

What Our Model Suggests

Our proven model does not conclusively predict an earnings beat for Bio-Rad this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Bio-Rad has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.31% and a Zacks Rank of 2. The company will release third-quarter 2021 results on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical Services, Inc. (WST - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Oct 28.

Insulet Corporation (PODD - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank of 2. The company will announce third-quarter 2021 results on Nov 4.