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Bio-Rad (BIO) Q1 Earnings Surpass Estimates, Guidance Up

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Bio-Rad Laboratories, Inc. BIO posted first-quarter 2021 adjusted earnings per share (EPS) of $5.21, which surpassed the Zacks Consensus Estimate by 108.4%. Moreover, the bottom line rose 173% 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 $32.38 per share in the quarter, up 42.5% from the year-ago quarter's EPS of $22.72.

Revenues in Detail

Revenues of $726.8 million in the quarter surpassed the Zacks Consensus Estimate by 9.9%. Moreover, revenues improved 27.1% from the year-ago quarter (up 23.4% at constant exchange rate or CER).

Per the company, first-quarter revenues were boosted by strong demand for products associated with COVID-19 testing and related research.

Segmental Analysis

Sales at the Life Science segment in the first quarter totaled $366.5 million, up 61.3% year over year and 56.9% at CER. The growth at CER was primarily driven by rise in demand for in 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 and EPS Surprise

BioRad Laboratories, Inc. price-consensus-eps-surprise-chart | BioRad Laboratories, Inc. Quote


Net sales at the Clinical Diagnostics segment totaled $358.5 million, up 5.4% on a year-over-year basis and 2.2% at CER. The increase was primarily driven by Diabetes and Quality Controls products, primarily in the Asia-Pacific region.

Margins

In the quarter under review, Bio-Rad’s gross profit rose 26.2% to $460.2 million. Gross margin contracted 40 basis points (bps) to 55.1%. Per the company, adjusted gross margin was 59%, expanding 310 bps.

Operating expenses were $275.2 million in the first quarter, up 14.1% year over year. Operating profit totaled $125.5 million, reflecting an upsurge of 64.9% from the prior-year quarter. Further, operating margin in the first quarter expanded 395 bps to 17.3%.

Company-adjusted operating margin was 25.8%, expanding 1190 bps year over year.

Financial Update

Bio-Rad exited the first quarter of 2021 with cash and cash equivalents (including short-term investments) of $1.02 billion compared with $997 billion at the end of 2020.Total debt (including current maturities) at the end of the first quarter was $12.6 million compared with $14.1 million at the end of the last-reported quarter.

Cumulative net cash flow from operating activities at the end of the first quarter was $113.6 million compared with year-ago figure of $62.8 million.

2021 Guidance

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

The company now anticipates revenue growth of 5.5-6% for full-year 2021 compared with the previous guidance of 4.5-5%. The Zacks Consensus Estimate for the same is pegged at $2.68 billion.

Our Take

Bio-Rad exited the first quarter of 2021 with better-than-expected results. The company witnessed solid bottom-line growth in the quarter. Despite the negative impact of the pandemic, its Life Science segment registered growth on robust sales of products associated with the pandemic, thus providing some counterbalance. Further, strength in many of its key product lines across major geographic regions buoys optimism. The uptick in the Clinical Diagnostics arm during the reported is encouraging as well.

The improvement in PCR, Droplet Digital PCR and Process Media product revenues resulted from robust demand due to COVID-19 testing and related research. Continued momentum of the Droplet Digital PCR business looks encouraging. The raised 2021 revenue guidance buoys optimism.

However, the year-over-year rise in the operating cost contraction of gross margin is worrying.

Zacks Rank and Key Picks

Currently, Bio-Rad carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Chemed Corporation CHE, Integra LifeSciences Holdings Corporation IART and HCA Healthcare, Inc. HCA. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chemed reported first-quarter 2021 adjusted EPS of $4.44, beating the Zacks Consensus Estimate by 5.7%. Net revenues of $527.4 million outpaced the consensus estimate by 2%. It currently carries a Zacks Rank #2 (Buy).

Integra, a Zacks Rank #2 company, reported first-quarter 2021 adjusted EPS of 69 cents, beating the Zacks Consensus Estimate by 23.2%. Revenues of $360.1 million outpaced the consensus mark by 2.9%.

HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion exceeded the Zacks Consensus Estimate by 2.2%. It currently sports a Zacks Rank #1.

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