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PacBio's (PACB) Q1 Earnings Miss Estimates, Revenues Beat

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Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, delivered adjusted loss per share of 37 cents in the first quarter of 2022, wider than the year-ago loss of 18 cents per share. The figure was also wider than the Zacks Consensus Estimate of a loss of 32 cents per share.

The company’s GAAP loss per share was 37 cents in the quarter, narrower than the year-ago loss of 45 cents per share.

Revenues in Detail

PacBio registered revenues of $33.2 million in the first quarter, up 14.4% year over year. The figure surpassed the Zacks Consensus Estimate by 1.3%.

The year-over-year uptick was partly driven by robust consumable and instrument sales.

Segmental Analysis

Product revenues amounted to $28.2 million, up 11.6% from the prior-year quarter.

PacBio placed 50 Sequel II/IIe systems during the first quarter of 2021 compared with 41 Sequel II systems placed in the year-ago quarter. This brings the total installed base of Sequel II/IIe systems to 424 as of Mar 31, 2022 compared with 244 as of Mar 31, 2021.

Instrument revenues for the first quarter of 2022 were $15.6 million, up 4.7% year over year.

Consumables revenues for the first quarter of 2022 were $12.7 million, up 22.1% from the prior-year quarter.

Service and other revenues came in at $4.9 million, up 33.4% year over year.

Pacific Biosciences of California, Inc. Price, Consensus and EPS Surprise

Pacific Biosciences of California, Inc. Price, Consensus and EPS Surprise
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 rose 10.5% to $14.3 million. Adjusted gross margin contracted 153 basis points (bps) to 43.2%.

Sales, general and administrative expenses rose 52.3% to $39.8 million. Research and development expenses surged 157.6% year over year to $52.9 million. Adjusted total operating expenses of $92.7 million climbed 98.6% year over year.

Adjusted total operating loss totaled $78.4 million in the reported quarter compared with the prior-year quarter’s adjusted total operating loss of $33.7 million.

Financial Position

PacBio exited first-quarter 2022 with cash, cash equivalents and investments (excluding short and long-term restricted cash) of $962.8 million compared with $1.04 billion at the end of 2021.

Guidance

PacBio has reiterated its financial outlook for full-year 2022 and has provided its expectations for the second quarter.

The company continues to expect its revenues for 2022 to be in the range of $160-$170 million, representing 23-30% growth from the comparable reported figure of 2021. The Zacks Consensus Estimate for the same is currently pegged at $164.3 million.

For the second quarter of 2022, PacBio expects revenues to grow sequentially compared with the reported revenues in the first quarter of 2022. The Zacks Consensus Estimate for the same is currently pegged at $38.9 million.

For the second quarter, the company also expects sequential revenue growth in both Americas and EMEA, partially offset by a slight fall in APAC due to the record consumables revenue quarter experienced in Japan in the first quarter of 2022.

Our Take

PacBio exited the first quarter of 2022 with wider-than-expected loss per share. Lower revenues from China (due to headwinds resulting from COVID-19 restrictions) and EMEA are disappointing. Continued adjusted loss per share incurred by the company is raising our apprehensions. Adjusted gross margin contraction also does not bode well for the company. The year-over-year operating loss for the company is another area of concern.

On a positive note, the company’s better-than-expected revenues in the reported quarter are encouraging. PacBio saw robust increases in both its Product, and Service and other revenues during the quarter. The company also gained from strength in its Instrument and Consumables revenues during the reported quarter.

PacBio continues to gain from its flagship Sequel system. Notably, the company’s expanding base of Sequel II/IIe systems buoys our optimism. The company’s robust performance across Americas and Japan, as well as the expansion of its foothold in newer regions across the world, was another plus. The company’s slew of tie-ups over the past few months augurs well.

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 Omnicell, Inc. OMCL, UnitedHealth Group Incorporated UNH and Alkermes plc ALKS.

Omnicell, carrying a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted earnings per share (“EPS”) of 83 cents, which beat the Zacks Consensus Estimate by 16.9%. Revenues of $318.8 million outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Omnicell has an estimated long-term growth rate of 16%. OMCL’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13.4%.

UnitedHealth, having a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 1.9%.

UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.

Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #1.

Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.


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