Yahoo Finance Why Is Bio-Rad (BIO) Up 7.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Bio-Rad Laboratories (BIO). Shares have added about 7.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Bio-Rad due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Bio-Rad Q1 Earnings Surpass Estimates, Margins Down
Bio-Rad posted first-quarter 2024 adjusted earnings per share of $2.29, beating the Zacks Consensus Estimate by 12.3%. However, the bottom line declined 31.4% from the prior-year quarter’s levels.
The quarter’s adjustments eliminate the impacts of certain non-recurring items like the amortization of purchased intangibles, Restructuring costs, gains/losses from the change in the fair market value of equity securities and gains/losses on equity-method investments.
The company’s GAAP EPS was $13.45 per share in the first quarter compared with GAAP earnings of $2.32 in the year-ago quarter.
Revenues in Detail
Revenues of $610.8 million in the first quarter missed the Zacks Consensus Estimate by 0.2%. The figure dropped 9.8% from the year-ago quarter’s levels (down 9.6% at the constant exchange rate or CER).
Segmental Analysis
Sales in the Life Science segment in the first quarter totaled $241.7 million, down 25.3% year over year and 25.2% at CER. The currency-neutral year-over-year sales decline was broad-based and was primarily due to weakness in the biotech and biopharma end markets and the economic environment in China.
Net sales in the Clinical Diagnostics segment totaled $368.6 million, up 4.7% on a year-over-year basis and 4.8% at CER. Increased demand for quality control, blood typing, and diabetes products primarily drove the currency-neutral year-over-year sales increase.
Margins
In the quarter under review, Bio-Rad’s gross profit fell 10.1% to $325.9 million. The gross margin contracted 18 basis points (bps) to 53.4%.
Operating expenses were $281.2 million in the first quarter, down 6.4% year over year. The operating profit totaled $44.7 million, down 27.8% from the prior-year quarter’s levels. The operating margin in the first quarter contracted 182 bps to 7.3%.
Financial Update
Bio-Rad exited the first quarter of 2024 with cash and cash equivalents (including short-term investments) of $1.65 billion compared with $1.61 billion at the end of fourth-quarter 2023. Total debt (including current maturities) at the end of the first quarter was $1.19 billion, almost in line with the reported figure at the end of the prior quarter.
The cumulative net cash flow from operating activities at the end of the first quarter was $697.9 million compared with the year-ago figure of $981.2 million.
2024 Guidance
Bio-Rad reinstated its guidance for full-year 2024.
The company anticipates non-GAAP currency-neutral revenue growth of approximately 1%-2.5%. The Zacks Consensus Estimate for revenues is pegged at $2.68 billion.
The adjusted operating margin projection for the full year is 13.5.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Bio-Rad has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Bio-Rad has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Bio-Rad belongs to the Zacks Medical - Products industry. Another stock from the same industry, Boston Scientific (BSX), has gained 4.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Boston Scientific reported revenues of $3.86 billion in the last reported quarter, representing a year-over-year change of +13.8%. EPS of $0.56 for the same period compares with $0.47 a year ago.
For the current quarter, Boston Scientific is expected to post earnings of $0.58 per share, indicating a change of +9.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Boston Scientific. Also, the stock has a VGM Score of D.
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Bio-Rad Laboratories, Inc. (BIO) : Free Stock Analysis Report
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