Bio-Rad (BIO) Up 8.8% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Bio-Rad Laboratories (BIO). Shares have added about 8.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Bio-Rad due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Bio-Rad Q2 Earnings Beat Estimates

Bio-Rad Laboratoriesposted second-quarter 2019 adjusted earnings per share (EPS) of $1.57, which beat the Zacks Consensus Estimate by 12.9%. The bottom line however fell 4.3% from the prior-year quarter.

Reported EPS in the quarter was $19.86 compared with $8.87 a year ago.

Revenues in Detail

Revenues in the quarter totaled $572.6 million, beating the Zacks Consensus Estimate by 1.7%. Revenues fell 0.6% from the year-ago quarter (up 2.7% at constant currency or cc).

Per management, solid demand across many of its key product lines led to growth across most geographical regions.

Segmental Analysis

Sales at the Life Sciences segment in the second quarter totaled $212.4 million, down 2.5% year over year and 0.1% at cc. Excluding Process Media sales, the Life Science business saw 7.5% year-over-year growth on a currency neutral basis.

Net sales at Clinical Diagnostics segment totaled $357.1 million, up 0.9% on a year-over-year basis and 4.8% at cc. This upside was primarily driven by solid growth in Quality Controls, Immunology, and Diabetes product lines across all three geographies.

Margins

Gross profit in the reported quarter totaled $307.8 million, up 2% from the prior-year quarter. Gross margin came in at 53.7%, expanding 137 basis points (bps). Operating margin was 9.8%, up 224 bps.

2019 Guidance Reaffirmed

For 2019, the company has reaffirmed its revenue growth guidance at 4-4.5% (cc). The Zacks Consensus Estimate for the same is pegged at $2.35 billion.

How Have Estimates Been Moving Since Then?

Estimates review followed a downward path over the past two months. The consensus estimate has shifted -5.61% due to these changes.

VGM Scores

At this time, Bio-Rad has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Bio-Rad has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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