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Pacific Biosciences (PACB) Q3 Earnings: What's in Store?

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Pacific Biosciences of California Inc. PACB is scheduled to report third-quarter 2015 earnings results on Oct 22. Last quarter, the company reported a loss of 16 cents per share, which was a couple of cents wider than the Zacks Consensus Estimate.

Let us see how things are shaping up for this announcement.

Factors Influencing This Quarter

Pacific Biosciences develops, manufactures and markets PacBio RS II Sequencing systems, which help in studying synthesis, composition, structure and regulation of deoxyribonucleic acid, popularly known as DNA.

We believe that Pacific Biosciences has significant growth prospects in plant & animal as well as human genome sequencing. The company's leading position in microbial sequencing also presents it a significant growth opportunity in the infectious disease market.

New products like the Sequel system, barcode sample prep kits continue to expand the company's product portfolio. Additionally, development and distribution collaborations with the likes of Roche NimbleGen and RainDance Technologies will drive market penetration going forward.

However, persistent losses and cash burning are the primary headwinds facing the company at present. Total operating expenses are also anticipated to increase approximately 15% over the 2014 figure, which will weigh on margins, in our view.

Earnings Whispers

Our proven model does not conclusively show that Pacific Biosciences is likely to beat the Zacks Consensus Estimate in the third quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP : The Earnings ESP for Pacific Biosciences is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 27 cents.

Zacks Rank : Pacific Biosciences' Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.

Stocks That Warrant a Look

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Masimo MASI with an earnings ESP of +3.23% and a Zacks Rank #1.

ICON Plc ICLR with an earnings ESP of +1.00% and a Zacks Rank #2.

Thermo Fisher Scientific TMO with an earnings ESP of +1.12% and a Zacks Rank #2.

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THERMO FISHER (TMO): Free Stock Analysis Report

MASIMO CORP (MASI): Free Stock Analysis Report

ICON PLC (ICLR): Free Stock Analysis Report

PACIFIC BIOSCI (PACB): 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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