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Bio-Rad (BIO) Q4 Earnings Surpass Estimates, Margins Down
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Bio-Rad Laboratories, Inc. (BIO - Free Report) posted fourth-quarter 2021 adjusted earnings per share (EPS) of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. However, the bottom line fell 19.9% 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.
For the full year, adjusted earnings were $15.66 per share, 48.9% up from the year-ago period. It also beat the Zacks Consensus Estimate by 2.2%.
GAAP loss of the company was $52.59 per share in the fourth quarter compared with GAAP earnings of $27.81 per share in the year-ago quarter.
Revenues in Detail
Revenues of $732.8 million in the quarter missed the Zacks Consensus Estimate by 0.5%. Moreover, revenues declined 7.2% from the year-ago quarter (down 6.9% at constant exchange rate or CER).
Full-year revenues were $2.92 billion, reflecting a 14.8% increase from the year-ago period (up 12.7% at constant exchange rate or CER). Revenues surpassed the Zacks Consensus Estimate by 0.7%.
Segmental Analysis
Sales at the Life Science segment in the fourth quarter totaled $326.6 million, down 23.8% year over year and 23.4% at CER. The CER sales decline was primarily attributed to lower qPCR product revenues due to the decline in COVID-related demand.
BioRad Laboratories, Inc. Price, Consensus and EPS Surprise
Net sales at the Clinical Diagnostics segment totaled $404.9 million, up 12.6% on a year-over-year basis and 12.8% at CER. The increase was primarily driven by a recovery in routine testing.
Margins
In the quarter under review, Bio-Rad’s gross profit fell 12.9% to $401 million. Gross margin contracted 354 basis points (bps) to 54.7%. Per the company, adjusted gross margin was 55.4%, contracting 280 bps.
Operating expenses were $294 million in the fourth quarter, up 3.2% year over year. Operating profit totaled $106.9 million, reflecting a decline of 38.9% from the prior-year quarter. Further, operating margin in the fourth quarter contracted 759 bps to 14.6%.
Company-adjusted operating margin was 15.4%, down 600 bps year over year.
Financial Update
Bio-Rad exited 2021 with cash and cash equivalents (including short-term investments) of $875 million compared with $997 million at the end of 2020. Total debt (including current maturities) at the end of 2021 was $11 million compared with $14.1 million at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $656.5 million compared with the year-ago figure of $575.3 million.
2022 Guidance
Bio-Rad has initiated its guidance for full-year 2022.
The company anticipates currency-neutral revenue growth of nearly 1-2%. The Zacks Consensus Estimate for the same is pegged at $2.80 billion.
Our Take
Bio-Rad exited the fourth quarter of 2021 on a mixed note with better-than-expected earnings and a revenue miss. The company continued to experience solid recovery in most of its key global markets as well as an uptick in demand for COVID-related products driven by the spread of the new Omicron variant. Further, strength in its key product lines across major geographic regions buoys optimism. The Diagnostics business registered growth across all of its product lines driven by a recovery of routine testing, which is now generally approaching pre-COVID levels.
However, Bio-Rad’s Life Sciences arm registered a year-over-year decline, primarily attributed to lower qPCR product revenues due to the decline in COVID-related demand. The year-over-year rise in operating costs and contraction of both margins are worrying. Further, foreign-exchange woes, stiff competition and pandemic-led macroeconomic troubles persist.
Zacks Rank and Key Picks
Bio-Rad currently carries a Zacks Rank #3 (Hold).
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.5% compares favorably with the industry’s 0.9%.
Allscripts Healthcare Solutions, Inc. (MDRX - Free Report) has an Earnings ESP of +10.11% and a Zacks Rank of #2 (Buy). Allscripts will release fourth quarter and full-year 2021 results on Feb 24.
Allscripts’ long-term earnings growth rate is estimated at 11.1%. MDRX’s earnings yield of 5% compares favorably with the industry’s (4.9%).
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +2.62% and a Zacks Rank of 2. Henry Schein will release fourth quarter and full-year 2021 results on Feb 15.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC's earnings yield of 6.4% compares favorably with the industry’s 4.4%.
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Bio-Rad (BIO) Q4 Earnings Surpass Estimates, Margins Down
Bio-Rad Laboratories, Inc. (BIO - Free Report) posted fourth-quarter 2021 adjusted earnings per share (EPS) of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. However, the bottom line fell 19.9% 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.
For the full year, adjusted earnings were $15.66 per share, 48.9% up from the year-ago period. It also beat the Zacks Consensus Estimate by 2.2%.
GAAP loss of the company was $52.59 per share in the fourth quarter compared with GAAP earnings of $27.81 per share in the year-ago quarter.
Revenues in Detail
Revenues of $732.8 million in the quarter missed the Zacks Consensus Estimate by 0.5%. Moreover, revenues declined 7.2% from the year-ago quarter (down 6.9% at constant exchange rate or CER).
Full-year revenues were $2.92 billion, reflecting a 14.8% increase from the year-ago period (up 12.7% at constant exchange rate or CER). Revenues surpassed the Zacks Consensus Estimate by 0.7%.
Segmental Analysis
Sales at the Life Science segment in the fourth quarter totaled $326.6 million, down 23.8% year over year and 23.4% at CER. The CER sales decline was primarily attributed to lower qPCR product revenues due to the decline in COVID-related demand.
BioRad Laboratories, Inc. Price, Consensus and EPS Surprise
BioRad Laboratories, Inc. price-consensus-eps-surprise-chart | BioRad Laboratories, Inc. Quote
Net sales at the Clinical Diagnostics segment totaled $404.9 million, up 12.6% on a year-over-year basis and 12.8% at CER. The increase was primarily driven by a recovery in routine testing.
Margins
In the quarter under review, Bio-Rad’s gross profit fell 12.9% to $401 million. Gross margin contracted 354 basis points (bps) to 54.7%. Per the company, adjusted gross margin was 55.4%, contracting 280 bps.
Operating expenses were $294 million in the fourth quarter, up 3.2% year over year. Operating profit totaled $106.9 million, reflecting a decline of 38.9% from the prior-year quarter. Further, operating margin in the fourth quarter contracted 759 bps to 14.6%.
Company-adjusted operating margin was 15.4%, down 600 bps year over year.
Financial Update
Bio-Rad exited 2021 with cash and cash equivalents (including short-term investments) of $875 million compared with $997 million at the end of 2020. Total debt (including current maturities) at the end of 2021 was $11 million compared with $14.1 million at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $656.5 million compared with the year-ago figure of $575.3 million.
2022 Guidance
Bio-Rad has initiated its guidance for full-year 2022.
The company anticipates currency-neutral revenue growth of nearly 1-2%. The Zacks Consensus Estimate for the same is pegged at $2.80 billion.
Our Take
Bio-Rad exited the fourth quarter of 2021 on a mixed note with better-than-expected earnings and a revenue miss. The company continued to experience solid recovery in most of its key global markets as well as an uptick in demand for COVID-related products driven by the spread of the new Omicron variant. Further, strength in its key product lines across major geographic regions buoys optimism. The Diagnostics business registered growth across all of its product lines driven by a recovery of routine testing, which is now generally approaching pre-COVID levels.
However, Bio-Rad’s Life Sciences arm registered a year-over-year decline, primarily attributed to lower qPCR product revenues due to the decline in COVID-related demand. The year-over-year rise in operating costs and contraction of both margins are worrying. Further, foreign-exchange woes, stiff competition and pandemic-led macroeconomic troubles persist.
Zacks Rank and Key Picks
Bio-Rad currently carries a Zacks Rank #3 (Hold).
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
AMN Healthcare Services, Inc. (AMN - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank of #1 (Strong Buy). AMN Healthcare is slated to release fourth quarter and full-year 2021 results on Feb 17. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 6.5% compares favorably with the industry’s 0.9%.
Allscripts Healthcare Solutions, Inc. (MDRX - Free Report) has an Earnings ESP of +10.11% and a Zacks Rank of #2 (Buy). Allscripts will release fourth quarter and full-year 2021 results on Feb 24.
Allscripts’ long-term earnings growth rate is estimated at 11.1%. MDRX’s earnings yield of 5% compares favorably with the industry’s (4.9%).
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +2.62% and a Zacks Rank of 2. Henry Schein will release fourth quarter and full-year 2021 results on Feb 15.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC's earnings yield of 6.4% compares favorably with the industry’s 4.4%.