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Pacific Biosciences to Incur Narrower-than-Expected Q3 Loss - Analyst Blog

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We expect Pacific Biosciences of California, Inc. ( PACB ) to post narrower-than-expected loss when it reports its third quarter 2014 results on Oct 23 after the market closes. Last quarter, the company had posted a positive earnings surprise of 3.57%.

Why a Likely Positive Surprise?

Our proven model shows that Pacific Biosciences is likely to post narrower-than-expected loss because it has the right combination of two key ingredients.

Positive Zacks ESP: Pacific Biosciences has an Earnings ESP of +36.84% since the Most Accurate Estimate stands at a loss of 12 cents, narrower than the Zacks Consensus Estimate of a loss of 19 cents. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.

Zacks Rank: Pacific Biosciences carries a Zacks Rank #2 (Buy) which when combined with a +36.84% ESP makes us confident that the company will report narrower-than-expected loss.

Note that stocks with Zacks Rank #1, 2 and 3 have a significantly higher chance of beating estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

What is Driving the Narrower-than-Expected Loss?

Pacific Biosciences' revenues are expected to get a boost from its lead product PacBio RS II systems. The company delivered nine and eight PacBio RS II systems in the first and second quarters respectively. Pacific Biosciences is expected to deliver a comparable number of these systems, if not more, in the third quarter as well.

The company's operating expenses are also expected to remain almost flat on a year-over-year basis as it was the case in the last couple of quarters. Pacific Biosciences posted positive earnings surprises in two of the last four quarters.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these also have the right combination of elements to post an earnings beat this quarter:

Teva Pharmaceutical Industries Ltd. ( TEVA ) has an earnings ESP of +5.79% and carries a Zacks Rank #2. It is scheduled to report its third-quarter results on Oct 30.

The earnings ESP for Ligand Pharmaceuticals Inc. ( LGND ) is +30.00% and it carries a Zacks Rank #2. The company is scheduled to release its third-quarter results on Oct 27.

Vertex Pharmaceuticals Inc. ( VRTX ) has an earnings ESP of +28.07% and carries a Zacks Rank #2. It is scheduled to report its third-quarter results on Oct 24.

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PACIFIC BIOSCI (PACB): Free Stock Analysis Report

VERTEX PHARM (VRTX): Free Stock Analysis Report

TEVA PHARM ADR (TEVA): Free Stock Analysis Report

LIGAND PHARMA-B (LGND): Free Stock Analysis Report

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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.


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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