PacBio (PACB) Q4 Earnings Match Estimates, Revenues Top
Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, delivered an adjusted loss per share of 35 cents in the fourth quarter of 2022, wider than the year-ago loss of 30 cents per share. The figure was in line with the Zacks Consensus Estimate.
Our projection of adjusted loss per share was also 35 cents, in line with the company-reported number.
The company’s GAAP loss per share was 37 cents in the quarter, wider than the year-ago loss per share of 31 cents.
The full-year adjusted loss was $1.38 per share, wider than the loss of 93 cents at the end of 2021.
Our projection of full-year adjusted loss per share was $1.38, in line with the company-reported number.
Revenues in Detail
PacBio registered revenues of $27.4 million in the fourth quarter, down 24.1% year over year. However, the figure surpassed the Zacks Consensus Estimate by 3.2%.
The fourth-quarter revenues compare to our estimate of $25.8 million.
The year-over-year decline was driven by the announcement of the launch of Revio in the fourth quarter, which impacted orders and shipments for Sequel IIe.
Full-year revenues were $128.3 million, reflecting a 1.7% decline from the comparable 2021 period.
Our projection of full-year revenues was $126.8 million.
Geographical Analysis
PacBio’s revenues from the Americas were $12 million, which declined by 36% year over year. This has primarily resulted from lower Sequel II/IIe placements with the recent announcement of the Revio launch.
This figure compares to our fourth-quarter projection of $14.4 million.
In the Asia-Pacific region, PacBio recorded revenues of $10.2 million, reflecting a 23% uptick year over year. The region continued to recover with growth from consumables and Sequel IIe system sales compared to the prior-year period. With the launch of Revio, several customers also purchased the Revio/Sequel IIe bundle to progress their HiFi sequencing volume, with plans to further expand upon the receipt of their first Revio.
This figure compares to our fourth-quarter projection of $7 million.
Europe, the Middle East and Africa (EMEA) region registered revenues of $5.2 million, which fell 43% year over year. This was primarily due to lower Sequel II/IIe placements and currency fluctuations in the pound sterling and euro, which resulted in a 7% headwind.
This figure compares to our fourth-quarter projection of $4.5 million.
Segmental Analysis
Product revenues amounted to $22.8 million, down 26.9% from the prior-year quarter. This figure compares to our fourth-quarter projection of $21.4 million.
PacBio delivered 18 Sequel II/IIe systems during the fourth quarter of 2022 compared with 48 Sequel II systems placed in the year-ago quarter. This brings the total installed base of Sequel II/IIe systems to 512 as of Dec 31, 2022, compared with 374 as of Dec 31, 2021.
Instrument revenues for the fourth quarter of 2022 were $6.1 million, down 62.3% year over year, primarily resulting from the announcement of the launch of Revio in the fourth quarter, which impacted orders and shipments for Sequel IIe.
This figure compares to our fourth-quarter projection of $8.6 million.
Consumables revenues for the fourth quarter of 2022 were $16.7 million, up 11.3% from the prior-year quarter. This figure compares to our fourth-quarter projection of $12.8 million.
Service and other revenues came in at $4.6 million, down 5.6% year over year. This figure compares to our fourth-quarter projection of $4.4 million.
Pacific Biosciences of California, Inc. Price, Consensus and EPS Surprise
Pacific Biosciences of California, Inc. price-consensus-eps-surprise-chart | Pacific Biosciences of California, Inc. Quote
Margin Trend
In the quarter under review, PacBio’s adjusted gross profit fell 46.7% to $9 million. Adjusted gross margin contracted a huge 1405 basis points to 33%.
We had projected a 31.1% of adjusted gross margin for the fourth quarter.
Sales, general and administrative expenses rose 22.3% to $45 million. Research and development expenses rose 0.1% year over year to $42.6 million. Adjusted total operating expenses of $87.6 million climbed 10.4% year over year.
The adjusted total operating loss totaled $78.6 million in the reported quarter compared with the prior-year quarter’s adjusted total operating loss of $62.4 million.
Financial Position
PacBio exited the full-year 2022 with cash, cash equivalents and investments (excluding short-term and long-term restricted cash) of $772.3 million compared with $1.04 billion at the end of 2021.
Guidance
PacBio has initiated its financial outlook for 2023.
The company expects to achieve revenues in the range $165 million to $180 million, representing growth of 29-40% from comparable 2022 figures. The Zacks Consensus Estimate for the same stands at $178.3 million.
Our Take
PacBio exited the fourth quarter of 2022 with in-line earnings and better-than-expected revenues. The company saw a robust increase in its Consumables revenues during the reported quarter. Robust performance in the Asia-Pacific region is also encouraging. Continued strong prospects for the company’s Revio and Onso systems, with customers placing orders for them, looks promising for the stock. The recent launch of the Paraphrase tool, which was confirmed during the fourth-quarter earnings call, augurs well. PacBio has entered into a few collaborations over the past few months, which looks promising.
Yet, dismal top-line and bottom-line results are disappointing. The year-over-year fall in both Service and other revenues and product revenues is concerning. The fall in Instrument revenues and continued adjusted loss per share incurred by the company are also worrying. Lower revenues from the Americas and EMEA are worrying. The contraction of the adjusted gross margin does not bode well. The year-over-year operating loss for the company is another area of concern.
Zacks Rank and Key Picks
PacBio currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, McKesson Corporation MCK and Hologic, Inc. HOLX.
Cardinal Health, carrying a Zacks Rank #2 (Buy), reported second-quarter fiscal 2023 adjusted EPS of $1.32, beating the Zacks Consensus Estimate by 16.8%. Revenues of $51.47 billion outpaced the consensus mark by 2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 11.6%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 6.4%.
McKesson, having a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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