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Will Life Sciences Sales Boost Bio-Rad's (BIO) Q1 Earnings?

Zacks Equity Research

Bio-Rad Laboratories, Inc. BIO is scheduled to report first-quarter 2019 results, after the market closes on May 8.

In the last reported quarter, the company’s earnings per share surpassed the Zacks Consensus Estimate by 32.3%. It delivered positive surprises in three of the trailing four quarters, the average beat being 15.56%.

Let’s take a look at how things are shaping up prior to this announcement.

Factors at Play

Of late, the company is registering a strong top-line performance on balanced growth across all geographies within the Americas and the Asia-Pacific region.

Under the Life Sciences segment, solid investment across several geographies combined with the launch of innovative products and technologies is leading to robust growth. Particularly, Bio-Rad is witnessing consistent strong demand for its Cell Biology, Western Blot, Digital PCR (polymerase chain reaction) products, gene expression and antibody products. These should once again boost the company’s performance within this space in the quarter under review.

Bio-Rad Laboratories, Inc. Price and EPS Surprise

Bio-Rad Laboratories, Inc. Price and EPS Surprise | Bio-Rad Laboratories, Inc. Quote

Moreover, the company expects a rebound in the process media performance right from the onset of 2019, which registered dull sales in the second half of 2018.

Within clinical diagnostics, following the company’s introduction to the blood typing market of the United States, it has been reporting strong sales.Bio-Rad is once again expected to deliver solid growth in this geography, especially for blood typing, quality control and autoimmune testing products, in the upcoming quarterly release. Looking at the changing dynamics of the global blood typing market’s pricing environment, the company is optimistic about the business’ growth potential and its margin-expansion opportunity.

Last year, the company placed more than 2,000 new instruments around the world, which bodes well for its higher consumable sales in the years to come. We expect to see a positive outcome here as well from the first quarter itself.

Here’s What the Quantitative Model Predicts

The proven Zacks model clearly indicates that a company with a Zacks Rank 1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Bio-Rad has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s  0.00% Earnings ESP in the combination complicates surprise prediction.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider

Here are a few stocks worth considering as these have the right mix of elements to beat on earnings this time around.

Unum Therapeutics Inc. UMRX has an Earnings ESP of +13.60% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Neon Therapeutics, Inc. NTGN has an Earnings ESP of +17.92% and is a Zacks #3 Ranked player.

Acceleron Pharma Inc. XLRN has an Earnings ESP of +0.16% and a Zacks Rank #2.

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