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PacBio's (PACB) Q3 Earnings Miss Estimates, Revenues Top

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·5 min read
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  • PACB
  • TMO
  • WST
  • CHE

Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, delivered adjusted loss per share of 23 cents in the third quarter of 2021, wider than the year-ago loss of 14 cents per share. The figure was also wider than the Zacks Consensus Estimate of loss of 21 cents per share.

The company’s GAAP earnings per share (EPS) was 8 cents in the quarter against the year-ago loss of 14 cents per share.

Revenues in Detail

PacBio registered revenues of $34.9 million in the third quarter, up 82.8% year over year. The figure surpassed the Zacks Consensus Estimate by 5.9%.

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

Sequentially, the top line improved 13.9%.

Segmental Analysis

Product revenues amounted to $30.5 million, up 14.9% from the prior-year quarter.

PacBio placed 44 Sequel II/IIe systems during the third quarter of 2021 compared to 20 Sequel II systems in the year-ago quarter. This brings the total installed base of Sequel II/IIe systems to 326 as of Sep 30, 2021 compared with 168 as of Sep 30, 2020.

Instrument revenues for the third quarter of 2021 were $15.9 million, up 106.5% year over year.

Consumables revenues for the third quarter of 2021 were $14.6 million, up 82.5% from the prior-year quarter.

Service and Other Revenues came in at $4.4 million, up 33.3% 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 gross profit rose 119.2% to $15.5 million. Gross margin expanded a huge 737 basis points (bps) to 44.4%.

Sales, general and administrative expenses rose 113.9% to $31.6 million. Research and development expenses went up 67% year over year to $27.5 million. Adjusted total operating expenses of $59.1 million surged 89.2% year over year.

Adjusted total operating loss totaled $43.6 million in the reported quarter compared with the prior-year quarter’s adjusted total operating loss of $24.2 million.

Financial Position

PacBio exited the third quarter of 2021 with cash, cash equivalents and investments (excluding short and long-term restricted cash) of $1.08 billion compared with $1.14 billion at the end of the second quarter.

Guidance

PacBio has reiterated its financial outlook for full-year 2021, which it had provided during its second-quarter earnings call in August.

The company expects its revenues for 2021 to be in the range of $128 million-$132 million, representing 62-67% growth from the comparable reported figure of 2020. The Zacks Consensus Estimate for the same is currently pegged at $130.4 million.

Our Take

PacBio exited the third quarter of 2021 with wider-than-expected loss per share. The continued adjusted loss per share incurred by the company is raising our apprehensions. 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. The company’s expanding base of Sequel II/IIe systems buoys our optimism. The company’s robust performance across geographies was another plus. Adoption of PacBio’s high-quality sequencing platforms by global genomics and diagnostic testing company — Prenetics Group Limited — is also encouraging. PacBio’s slew of tie-ups and buyouts over the past few months also augurs well. Gross margin expansion also bodes well for the stock.

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 West Pharmaceutical Services, Inc. WST, Thermo Fisher Scientific Inc. TMO and Chemed Corporation CHE.

West Pharmaceutical, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Third-quarter revenues of $706.5 million outpaced the consensus mark by 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently flaunts a Zacks Rank #1.

Chemed reported third-quarter 2021 adjusted EPS of $5.06, which surpassed the Zacks Consensus Estimate by 13.5%. Third-quarter revenues of $538.7 million outpaced the Zacks Consensus Estimate by 1.3%. It currently has a Zacks Rank #2.


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