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Bio-Rad Laboratories (BIO) to Post Q2 Earnings: What Awaits?
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Bio-Rad Laboratories, Inc. (BIO - Free Report) is set to release second-quarter 2023 results on Aug 3 after the closing bell.
The company posted adjusted earnings per share (EPS) of $3.34 in the last reported quarter, which beat the Zacks Consensus Estimate by 3.09%. Bio-Rad beat earnings estimates in three of the trailing four quarters and missed the same in one, the average surprise being 9.21%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Life Science
Bio-Rad’s Life Science segment is likely to have witnessed year-over-year currency-neutral core revenue growth in the second quarter, driven by qPCR products, Western loading and digital PCR. During the first quarter months, the demand for the new QX600 Droplet Digital PCR (ddPCR) system and customer acceptance has been remarkable, which we expect to have significantly benefited BIO’s top line in the to-be-reported quarter.
On the last earnings call, the company highlighted the expected launch of the ddPCR microsatellite instability kit toward the end of the second quarter. This assay kit includes an automated analysis package and enables clinical researchers to assess microsatellite instability status across multiple cancers. The addition is likely to have expanded Bio-Rad’s oncology assay menu for Droplet Digital PCR, which buoys optimism.
Despite the sales slowdown in the last quarter, the process chromatography franchise is expected to have witnessed growth, backed by the solid and consistent underlying demand for the business. In the first quarter, Bio-Rad experienced softness in smaller biopharma companies and a tough comparison for the process chromatography franchise related to a very large customer order in the first quarter of 2022, which resulted in a year-over-year decline in revenues.
Geographically, we anticipate the Life Science segment to have posted core organic revenue growth in the Americas and Europe similar to the first quarter. The overall performance in Russia is likely to have dented the company’s quarterly sales due to the further tightening of sanctions. On the supply-chain front, Bio-Rad is expected to have made progress in reducing the elevated Life Science backlog position throughout the second quarter.
Per our model, revenues from this segment indicate an improvement of 22.9% year over year to $396.3 million in the second quarter of 2023.
Clinical Diagnostics
Excluding COVID-19-related sales, core Clinical Diagnostics sales are expected to have increased in the second quarter compared to the prior-year period. The year-over-year growth is likely to have been driven by robust demand for diagnostic instruments, primarily within blood typing and diabetes. However, manufacturing constraints are expected to have affected the product supply.
Last quarter, Bio-Rad witnessed a strong rebound in the placement of instruments in China, providing a solid foundation for increased reagent pull-through volumes in the coming quarters. We expect this trend to have continued in the second quarter of 2023, benefiting the company’s top line.
On a geographic basis, the Diagnostics Group is likely to have delivered increased currency-neutral core revenues in Asia, the Americas and Europe. As the global effects of COVID-19 continue to recede, the fairly robust demand for the company’s clinical systems is expected to have continued in the to-be-reported quarter.
Our model projects the segment’s revenues for the second quarter to improve 5.7% year over year to $388.8 million.
Meanwhile, we expect market and operational challenges to have persisted in the second quarter, resulting Bio-Rad to deliver a lower-than-expected performance. Increased sanctions on sales of certain products to Russia and a growing revenue headwind from biopharma companies relating to funding constraints are likely to have resulted in a slower pace of growth for the Life Science segment.
As witnessed in the last quarter, the company’s gross margin is expected to have declined year over year due to the unfavorable product mix, the higher cost of raw materials and the higher-than-anticipated placement of clinical systems at low margins.
Q2 Estimates
The Zacks Consensus Estimate for Bio-Rad’s second-quarter 2023 revenues is pegged at $687.9 million, suggesting a drop of 0.5% from the year-ago reported figure.
The Zacks Consensus Estimate for its second-quarter 2023 EPS of $2.56 indicates a year-over-year decline of 24.3%.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.
Earnings ESP: Bio-Rad has an Earnings ESP of +1.17%. 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 #4 (Sell).
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this time:
MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 4.48%. The Zacks Consensus Estimate for Mckesson’s fiscal 2024 first-quarter EPS is expected to rise 0.5% from the year-ago reported figure.
Zimmer Biomet (ZBH - Free Report) has an Earnings ESP of +2.34% and a Zacks Rank #2. The company is scheduled to release second-quarter 2023 results on Aug 1.
ZBH’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 7.38%. The Zacks Consensus Estimate for Zimmer Biomet’s second-quarter EPS is expected to be in line with the year-ago reported figure.
AmerisourceBergen currently has an Earnings ESP of +0.86% and a Zacks Rank #2. ABC is scheduled to release third-quarter fiscal 2023 results on Aug 2.
The company’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 3.14%. The Zacks Consensus Estimate for ABC’s fiscal 2023 third-quarter EPS is expected to improve 5.6% from the year-ago reported figure.
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Bio-Rad Laboratories (BIO) to Post Q2 Earnings: What Awaits?
Bio-Rad Laboratories, Inc. (BIO - Free Report) is set to release second-quarter 2023 results on Aug 3 after the closing bell.
The company posted adjusted earnings per share (EPS) of $3.34 in the last reported quarter, which beat the Zacks Consensus Estimate by 3.09%. Bio-Rad beat earnings estimates in three of the trailing four quarters and missed the same in one, the average surprise being 9.21%.
Let’s look at how things have shaped up before this announcement.
Factors at Play
Life Science
Bio-Rad’s Life Science segment is likely to have witnessed year-over-year currency-neutral core revenue growth in the second quarter, driven by qPCR products, Western loading and digital PCR. During the first quarter months, the demand for the new QX600 Droplet Digital PCR (ddPCR) system and customer acceptance has been remarkable, which we expect to have significantly benefited BIO’s top line in the to-be-reported quarter.
On the last earnings call, the company highlighted the expected launch of the ddPCR microsatellite instability kit toward the end of the second quarter. This assay kit includes an automated analysis package and enables clinical researchers to assess microsatellite instability status across multiple cancers. The addition is likely to have expanded Bio-Rad’s oncology assay menu for Droplet Digital PCR, which buoys optimism.
Bio-Rad Laboratories, Inc. Price and EPS Surprise
Bio-Rad Laboratories, Inc. price-eps-surprise | Bio-Rad Laboratories, Inc. Quote
Despite the sales slowdown in the last quarter, the process chromatography franchise is expected to have witnessed growth, backed by the solid and consistent underlying demand for the business. In the first quarter, Bio-Rad experienced softness in smaller biopharma companies and a tough comparison for the process chromatography franchise related to a very large customer order in the first quarter of 2022, which resulted in a year-over-year decline in revenues.
Geographically, we anticipate the Life Science segment to have posted core organic revenue growth in the Americas and Europe similar to the first quarter. The overall performance in Russia is likely to have dented the company’s quarterly sales due to the further tightening of sanctions. On the supply-chain front, Bio-Rad is expected to have made progress in reducing the elevated Life Science backlog position throughout the second quarter.
Per our model, revenues from this segment indicate an improvement of 22.9% year over year to $396.3 million in the second quarter of 2023.
Clinical Diagnostics
Excluding COVID-19-related sales, core Clinical Diagnostics sales are expected to have increased in the second quarter compared to the prior-year period. The year-over-year growth is likely to have been driven by robust demand for diagnostic instruments, primarily within blood typing and diabetes. However, manufacturing constraints are expected to have affected the product supply.
Last quarter, Bio-Rad witnessed a strong rebound in the placement of instruments in China, providing a solid foundation for increased reagent pull-through volumes in the coming quarters. We expect this trend to have continued in the second quarter of 2023, benefiting the company’s top line.
On a geographic basis, the Diagnostics Group is likely to have delivered increased currency-neutral core revenues in Asia, the Americas and Europe. As the global effects of COVID-19 continue to recede, the fairly robust demand for the company’s clinical systems is expected to have continued in the to-be-reported quarter.
Our model projects the segment’s revenues for the second quarter to improve 5.7% year over year to $388.8 million.
Meanwhile, we expect market and operational challenges to have persisted in the second quarter, resulting Bio-Rad to deliver a lower-than-expected performance. Increased sanctions on sales of certain products to Russia and a growing revenue headwind from biopharma companies relating to funding constraints are likely to have resulted in a slower pace of growth for the Life Science segment.
As witnessed in the last quarter, the company’s gross margin is expected to have declined year over year due to the unfavorable product mix, the higher cost of raw materials and the higher-than-anticipated placement of clinical systems at low margins.
Q2 Estimates
The Zacks Consensus Estimate for Bio-Rad’s second-quarter 2023 revenues is pegged at $687.9 million, suggesting a drop of 0.5% from the year-ago reported figure.
The Zacks Consensus Estimate for its second-quarter 2023 EPS of $2.56 indicates a year-over-year decline of 24.3%.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.
Earnings ESP: Bio-Rad has an Earnings ESP of +1.17%. 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 #4 (Sell).
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this time:
Mckesson (MCK - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank #2. The company will release first-quarter fiscal 2024 results on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, with the average surprise being 4.48%. The Zacks Consensus Estimate for Mckesson’s fiscal 2024 first-quarter EPS is expected to rise 0.5% from the year-ago reported figure.
Zimmer Biomet (ZBH - Free Report) has an Earnings ESP of +2.34% and a Zacks Rank #2. The company is scheduled to release second-quarter 2023 results on Aug 1.
ZBH’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 7.38%. The Zacks Consensus Estimate for Zimmer Biomet’s second-quarter EPS is expected to be in line with the year-ago reported figure.
AmerisourceBergen currently has an Earnings ESP of +0.86% and a Zacks Rank #2. ABC is scheduled to release third-quarter fiscal 2023 results on Aug 2.
The company’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 3.14%. The Zacks Consensus Estimate for ABC’s fiscal 2023 third-quarter EPS is expected to improve 5.6% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.