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Bio-Rad Laboratories, Inc. (BIO - Free Report) posted second-quarter 2024 adjusted earnings per share (EPS) of $3.11, which beat the Zacks Consensus Estimate by 46.7%. The bottom line increased 3.7% from the prior-year quarter’s levels.
The quarter’s adjustments primarily eliminate the impacts of certain non-recurring items like the amortization of purchased intangibles, restructuring costs and losses from the change in the fair market value of equity securities, among others.
The company’s GAAP loss was $76.26 per share in the second quarter compared with a GAAP loss of $39.59 in the year-ago quarter.
Revenues in Detail
Revenues of $638.5 million in the second quarter missed the Zacks Consensus Estimate by 1.6%. The figure also declined 6.3% from the year-ago quarter’s levels (down 5.4% at the constant exchange rate or CER).
Segmental Analysis
Sales in the Life Science segment in the second quarter totaled $250.5 million, down 16.5% year over year and 15.9% 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.
Net sales in the Clinical Diagnostics segment totaled $387.9 million, up 2.1% on a year-over-year basis and 3.2% at CER. Increased demand for quality control and blood typing products primarily drove the currency-neutral year-over-year sales increase.
Bio-Rad Laboratories, Inc. Price, Consensus and EPS Surprise
In the quarter under review, Bio-Rad’s gross profit fell 2% to $355.1 million. However, gross margin expanded 240 basis points (bps) to 55.6%. This gross margin improvement was primarily driven by cost control initiatives, product mix and lower logistics costs, partially offset by lower sales volume and continued higher material prices for constrained or strategic materials.
Operating expenses were $253.6 million in the second quarter, down 7.1% year over year. Operating profit totaled $101.5 million, up 3.2% from the prior-year quarter’s levels. The operating margin in the second quarter expanded 274 bps to 15.9%.
Financial Update
Bio-Rad exited the second quarter of 2024 with cash and cash equivalents (including short-term investments) of $1.62 billion compared with $1.65 billion at the end of first-quarter 2024. Total debt (including current maturities) at the end of the second quarter was $1.20 billion, compared with $1.19 billion at the end of the prior quarter.
Cumulative net cash flow from operating activities at the end of the second quarter was $167.4 million compared with the year-ago figure of $196.2 million.
Bio-Rad's board of directors also raised the amount available under the company's 2023 share repurchase program to allow the company to repurchase up to an additional $500 million of the company’s outstanding common stock. As of Jul 31, 2024, approximately $578 million was available for repurchase under this plan.
2024 Guidance
Bio-Rad announced a guidance cut for full-year 2024.
The company anticipates non-GAAP currency-neutral revenues to decline 2.5% to 4% (in contrast to the earlier estimate of growth of approximately 1%-2.5%). The Zacks Consensus Estimate for revenues is pegged at $2.69 billion, implying 0.7% growth from the 2023 reported figure.
The adjusted operating margin projection for the full year is projected in the range of 12%-13% (down from the earlier guidance of 13.5%-14%).
Our Take
Bio-Rad exited the second quarter of 2024 on a mixed note, with earnings beating estimates but revenues missing the same. The ongoing weaknesses in the biotech and biopharma end markets primarily impacted sales of the company’s Life Science segment products. It continued to experience weak demand for Life Science products in China.
On a positive note, the company witnessed growth across the Clinical Diagnostics segment, primarily driven by increased demand for quality control and blood typing products. Within this business, the company registered broad-based growth in all regions with a solid performance in the immune hematology business.
The lowered 2024 guidance is reflective of lower process chromatography demand and slower-than-expected biopharma recovery, offset by higher levels of clinical diagnostics sales.
Zacks Rank & Key Picks
Bio-Rad currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an estimated long-term earnings growth rate of 16.1% for 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2, reported second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 3.31%.
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Bio-Rad (BIO) Q2 Earnings Surpass Estimates, Guidance Lowered
Bio-Rad Laboratories, Inc. (BIO - Free Report) posted second-quarter 2024 adjusted earnings per share (EPS) of $3.11, which beat the Zacks Consensus Estimate by 46.7%. The bottom line increased 3.7% from the prior-year quarter’s levels.
The quarter’s adjustments primarily eliminate the impacts of certain non-recurring items like the amortization of purchased intangibles, restructuring costs and losses from the change in the fair market value of equity securities, among others.
The company’s GAAP loss was $76.26 per share in the second quarter compared with a GAAP loss of $39.59 in the year-ago quarter.
Revenues in Detail
Revenues of $638.5 million in the second quarter missed the Zacks Consensus Estimate by 1.6%. The figure also declined 6.3% from the year-ago quarter’s levels (down 5.4% at the constant exchange rate or CER).
Segmental Analysis
Sales in the Life Science segment in the second quarter totaled $250.5 million, down 16.5% year over year and 15.9% 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.
Net sales in the Clinical Diagnostics segment totaled $387.9 million, up 2.1% on a year-over-year basis and 3.2% at CER. Increased demand for quality control and blood typing products primarily drove the currency-neutral year-over-year sales increase.
Bio-Rad Laboratories, Inc. Price, Consensus and EPS Surprise
Bio-Rad Laboratories, Inc. price-consensus-eps-surprise-chart | Bio-Rad Laboratories, Inc. Quote
Margins
In the quarter under review, Bio-Rad’s gross profit fell 2% to $355.1 million. However, gross margin expanded 240 basis points (bps) to 55.6%. This gross margin improvement was primarily driven by cost control initiatives, product mix and lower logistics costs, partially offset by lower sales volume and continued higher material prices for constrained or strategic materials.
Operating expenses were $253.6 million in the second quarter, down 7.1% year over year. Operating profit totaled $101.5 million, up 3.2% from the prior-year quarter’s levels. The operating margin in the second quarter expanded 274 bps to 15.9%.
Financial Update
Bio-Rad exited the second quarter of 2024 with cash and cash equivalents (including short-term investments) of $1.62 billion compared with $1.65 billion at the end of first-quarter 2024. Total debt (including current maturities) at the end of the second quarter was $1.20 billion, compared with $1.19 billion at the end of the prior quarter.
Cumulative net cash flow from operating activities at the end of the second quarter was $167.4 million compared with the year-ago figure of $196.2 million.
Bio-Rad's board of directors also raised the amount available under the company's 2023 share repurchase program to allow the company to repurchase up to an additional $500 million of the company’s outstanding common stock. As of Jul 31, 2024, approximately $578 million was available for repurchase under this plan.
2024 Guidance
Bio-Rad announced a guidance cut for full-year 2024.
The company anticipates non-GAAP currency-neutral revenues to decline 2.5% to 4% (in contrast to the earlier estimate of growth of approximately 1%-2.5%). The Zacks Consensus Estimate for revenues is pegged at $2.69 billion, implying 0.7% growth from the 2023 reported figure.
The adjusted operating margin projection for the full year is projected in the range of 12%-13% (down from the earlier guidance of 13.5%-14%).
Our Take
Bio-Rad exited the second quarter of 2024 on a mixed note, with earnings beating estimates but revenues missing the same. The ongoing weaknesses in the biotech and biopharma end markets primarily impacted sales of the company’s Life Science segment products. It continued to experience weak demand for Life Science products in China.
On a positive note, the company witnessed growth across the Clinical Diagnostics segment, primarily driven by increased demand for quality control and blood typing products. Within this business, the company registered broad-based growth in all regions with a solid performance in the immune hematology business.
The lowered 2024 guidance is reflective of lower process chromatography demand and slower-than-expected biopharma recovery, offset by higher levels of clinical diagnostics sales.
Zacks Rank & Key Picks
Bio-Rad currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has an estimated long-term earnings growth rate of 16.1% for 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an estimated earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2, reported second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion exceeded the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company surpassed earnings estimates in each of the trailing four quarters, the average being 3.31%.