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Bio-Rad (BIO) Q2 Earnings Top Estimates, 2021 View Raised

Bio-Rad Laboratories, Inc. BIO posted second-quarter 2021 adjusted earnings per share (EPS) of $3.54, which surpassed the Zacks Consensus Estimate by 86.3%. Moreover, the bottom line rose 119.9% 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.

GAAP EPS of the company was $30.32 per share in the quarter, down 5.7% from the year-ago figure.

Revenues in Detail

Revenues of $715.9 million in the quarter surpassed the Zacks Consensus Estimate by 17.3%. Moreover, revenues improved 33.4% from the year-ago quarter (up 27.5% at constant exchange rate or CER).

The company witnessed growth across all three regions during the second quarter. It is also witnessing continued gradual capacity improvement at both academic and diagnostic labs.

Segmental Analysis

Sales at the Life Science segment in the second quarter totaled $334.2 million, up 32.6% year over year and 27.1% at CER. Growth at CER was primarily driven by rise in demand for qPCR, Western Blotting, Droplet Digital PCR and Process Media products. A significant portion of the Life Science segment growth came from products used to support COVID-19 research and testing as well. Geographically, the company’s quarterly growth at CER was experienced by all regions.

BioRad Laboratories, Inc. Price, Consensus and EPS Surprise

 

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 $380.2 million, up 34.3% on a year-over-year basis and 28% at CER. The increase was primarily driven by the ongoing recovery across product lines in all regions.

Margins

In the quarter under review, Bio-Rad’s gross profit rose 37.1% to $401.6 million. Gross margin expanded 152 basis points (bps) to 56.1%. Per the company, adjusted gross margin was 56.9%, expanding 140 bps.

Operating expenses were $276.8 million in the second quarter, up 14.7% year over year. Operating profit totaled $124.8 million, reflecting a surge of 141.2% from the prior-year quarter. Further, operating margin in the second quarter expanded 779 bps to 17.4%.

Company-adjusted operating margin was 18.5%, expanding 670 bps year over year.

Financial Update

Bio-Rad exited the second quarter of 2021 with cash and cash equivalents (including short-term investments) of $1.17 billion compared with $1.02 billion at the end of first-quarter 2021.Total debt (including current maturities) at the end of the second quarter was $12.5 million compared with $12.6 million at the end of the last-reported quarter.

Cumulative net cash flow from operating activities at the end of the second quarter was $268.2 million compared with the year-ago figure of $154.9 million.

2021 Guidance

Bio-Rad has updated its guidance for full-year 2021.

The company now anticipates revenue growth of 10-10.5% for full-year 2021 compared with the previous guidance of 5.5-6%. The Zacks Consensus Estimate for the same is pegged at $2.71 billion.

Our Take

Bio-Rad exited the second quarter of 2021 with better-than-expected results. The company witnessed solid top-and bottom-line growth in the reported quarter. Increase in demand for qPCR, Western Blotting, Droplet Digital PCR, and Process Media products is encouraging. Further, strength in its key product lines across major geographic regions buoys optimism. The uptick in the Clinical Diagnostics arm driven by the ongoing recovery across product lines in all regions during the reported quarter is encouraging as well. The raised 2021 revenue guidance is indicative of the continuation of this bullish trend.

However, the year-over-year rise in operating cost is worrying. Further, foreign-exchange woes, stiff competition and pandemic-led macroeconomic troubles persist.

Zacks Rank and Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Boston Scientific Corporation BSX, West Pharmaceutical Services, Inc. WST and Laboratory Corporation of America Holdings LH, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific reported second-quarter 2021 adjusted EPS of 40 cents, which beat the Zacks Consensus Estimate by 8.1%. Revenues of $3.08 billion outpaced the consensus mark by 4.4%.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%.

LabCorp reported second-quarter 2021 adjusted EPS of $6.13, surpassing the Zacks Consensus Estimate by 8.7%. Revenues of $3.84 billion exceeded the consensus estimate by 6.9%.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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