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Will Difficult Comparison Hurt Bio-Rad's (BIO) Q4 Earnings?

By Zacks Investment ResearchStock MarketsFeb 20, 2019 08:55PM ET
Will Difficult Comparison Hurt Bio-Rad's (BIO) Q4 Earnings?
By Zacks Investment Research   |  Feb 20, 2019 08:55PM ET
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Bio-Rad Laboratories, Inc. (NYSE:BIO) is scheduled to report fourth-quarter and 2018 results, after market closes on Feb 28.

In the last reported quarter, the company’s earnings per share missed the Zacks Consensus Estimate by 21.55%. However, the company delivered positive surprises in three of the trailing four quarters, the average beat being 11.78%.

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

Factors at Play

Over the past few quarters, the company has registered consistent top-line growth on balanced growth across all geographies. In the last-reported quarter, the company witnessed robust demand for many of its key product lines in the Americas and Asia-Pacific.

In the Life Sciences segment, solid investment across several geographical regions combined with the launch of innovative products and technologies resulted in 12% growth at CER in the first three quarters of 2018. In the previously reported quarter, this business reported year-over-year growth of 8% at CER driven by growth in the cell biology, droplet Digital PCR, western blot, food safety and process media product lines.

However, this time, the company apprehends a year-over-year decline in revenues within this segment due to extremely difficult comparison. The fourth quarter of 2017 was a record quarter for Bio-Rad, with revenues exceeding $620 million. Particularly, the Life Sciences segment grew more than 12% aided by the growth recovery in process media.

In the last-reported quarter, within Clinical Diagnostics, the company forayed into the blood typing market of the United States. For the fourth quarter, growth within this business is expected through product lines like immunology, diabetes monitoring, blood typing and quality control. We expect the company to witness increased sales of Bioplex 2200 instruments as well.

Here’s What Our Quantitative Model Predicts

Per the proven Zacks model, 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 of 4 (Sell). Moreover, it has an Earnings ESP of 0.00%, which 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

Stocks to Consider

Here are a few medical stocks worth considering with the right combination of elements to beat on earnings in the upcoming quarterly releases.

AC Immune SA (NASDAQ:ACIU) has an Earnings ESP of +86.79% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aduro Biotech (NASDAQ:ADRO) has an Earnings ESP of +5.23% and a Zacks Rank of #2.

Aptose Biosciences (NASDAQ:APTO) has an Earnings ESP of +7.69% and a Zacks Rank #3.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year? Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

Bio-Rad Laboratories, Inc. (BIO): Free Stock Analysis Report

Aduro Biotech, Inc. (ADRO): Free Stock Analysis Report

AC Immune SA (ACIU): Free Stock Analysis Report

Aptose Biosciences, Inc. (APTO): Free Stock Analysis Report

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Zacks Investment Research
Will Difficult Comparison Hurt Bio-Rad's (BIO) Q4 Earnings?

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Will Difficult Comparison Hurt Bio-Rad's (BIO) Q4 Earnings?

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