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Bio-Rad (BIO) Earnings and Revenues Beat Estimates in Q4

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Bio-Rad Laboratories, Inc. (BIO - Free Report) posted fourth-quarter 2018 adjusted earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate of $1.61 by 32.3%. Earnings improved 12.1% from the prior-year quarter.

Adjusted EPS in 2018 was $5.84, up 38.1% year over year. The figure also surpassed the Zacks Consensus Estimate of $5.33 by 9.6%.

Revenues in Detail

Revenues in the quarter totaled $617.5 million, beating the Zacks Consensus Estimate by 1.1%. However, revenues declined 0.6% from the year-ago quarter but rose 1.9% at constant currency (cc).

Revenues in 2018 came in at $2.29 billion, up 6% year over year. The figure was ahead of the Zacks Consensus Estimate of $2.28 billion.

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 $239.6 million, up 0.3% year over year and 2.3% at cc. Per management, the upside reflects higher sales in the cell biology, droplet Digital PCR, gene expression and antibody products.

On a geographic basis, sales were particularly strong in the Americas and Asia Pacific.

Net sales at Clinical Diagnostics in the fourth quarter totaled $373.7 million, down 1.3% on a year-over-year basis. However, sales were up 1.7% at cc. The upside in the currency neutral sales indicates growth in immunology, infectious disease and quality-control product lines.

Geographically, sales rose in the Americas and Asia Pacific.

Margins

Gross profit in the reported quarter totaled $333.8 million, down 3.3% from the prior-year quarter. Gross margin came in at 54%, down 160 basis points (bps). Per the company, changes in product mix along with restructuring charges incurred for a planned consolidation of a manufacturing site in Europe led to the decline in gross margin.

Adjusted gross margin came in at 55.6%, up 60 bps year over year.

Adjusted operating income grossed $68.2, up 1% from the year-ago quarter.

Guidance Issued

For 2019, the company issued revenue growth guidance of 4-4.5% (cc). The Zacks Consensus Estimate for the same is pegged at $2.28 billion.

Our Take

Bio-Rad exited 2018 on a solid note. We are encouraged with the year-over-year rise in earnings. Sales growth at constant currency at the Clinical Diagnostics segment was impressive as well. The company also saw strong growth in the Life Science segment and cell biology, droplet Digital PCR, gene expression and antibody product lines. Further, solid revenue growth in geographies like Americas and Asia Pacific buoys optimism.

We are also upbeat about the company’s receipt of FDA approval for the QXDx AutoDG ddPCR System, which uses Bio-Rad’s Droplet Digital PCR technology, and the QXDx BCR-ABL %IS Kit.

However, challenges associated with the implementation of the global ERP system raise concerns.

Zacks Rank & Key Picks

Bio-Rad has a Zacks Rank #3 (Hold).

A few better-ranked stocks that posted solid quarterly results are Varian Medical Systems , AngioDynamics (ANGO - Free Report) and CONMED Corporation (CNMD - Free Report) . 

Varian reported fiscal first-quarter adjusted EPS of $1.06, in line with the Zacks Consensus Estimate. Revenues of $741 million outpaced the consensus mark of $717.9 million. The stock has a Zacks Rank #2 (Buy).

AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, which surpassed the consensus estimate by 2.9%. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million beat the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

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