Back to top

Image: Bigstock

Bio-Rad (BIO) Down 0.3% Since Last Earnings Report: Can It Rebound?

Read MoreHide Full Article

A month has gone by since the last earnings report for Bio-Rad Laboratories (BIO - Free Report) . Shares have lost about 0.3% 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 Rides on Solid Life Sciences Segment in Q3

Bio-Rad posted third-quarter 2018 adjusted earnings per share (EPS) of 91 cents, which missed the Zacks Consensus Estimate of $1.16 by 21.6%. Earnings declined 10.8% from the prior-year quarter.

Revenues in Detail

Revenues in the quarter totaled $545.1 million, beating the Zacks Consensus Estimate by 1.1%. Revenues improved 2.1% from the year-ago quarter and rose 3.4% at constant currency (cc).

Per management, solid demand across many of its key product lines led to growth across most geographical regions.

Segmental Analysis

Sales at the Life Sciences segment totaled $206.6 million, up 7.1% year over year and 8% at cc. Per management, the upside reflects higher sales in the cell biology, droplet Digital PCR and food safety product lines. Further, the company continues to see increased demand for its process media product lines.

On a geographic basis, sales at cc were particularly strong in the United States, China and India.

Net sales at Clinical Diagnostics in the third quarter totaled $334 million, down 1.2% on a year-over-year basis. However, sales were up 0.5% at cc. The upside in the currency neutral sales indicates growth in immunology, diabetes monitoring, blood typing and quality-control product lines.

Geographically, sales rose in the Americas and Asia, partially offset by a decline in Europe.

Margins

Gross profit in the reported quarter totaled $286.7 million, down 4.1% from the prior-year quarter. Gross margin came in at 52.6%, down 340 basis points (bps). Per the company, changes in product mix, high service, warranty and reagent rental costs, along with extra inventory related expenses led to the decline in gross margin.

Adjusted gross margin came in at 53.5%, down 340 bps year over year.

Operating income grossed $36.3, down 6.4% from the year-ago quarter.

Guidance Updated

For 2018, the company reiterated revenue growth guidance at 4-4.5% (cc). The Zacks Consensus Estimate for the same is pegged at $2.72 billion.

Full-year operating margin is now projected in the 8-9% range from 10% stated earlier.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -27.11% due to these changes.

VGM Scores

Currently, Bio-Rad has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Bio-Rad has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Bio-Rad Laboratories, Inc. (BIO) - free report >>

Published in