Bio-Rad Laboratories reported after the close of the market Wednesday that its first quarter revenues rose a fraction of a percent year over year, besting Wall Street estimates.
Hercules, California-based Bio-Rad also disclosed during an earnings call that it acquired an undisclosed company that will expand its genomic reagents product portfolio.
For the three months ended March 31, 2019, Bio-Rad reported net sales of $554.0 million compared to $551.5 million during the same period a year ago. On a currency-neutral basis, quarterly sales increased 4 percent. On average, analysts had expected revenues of $550.0 million.
Life science segment revenues were $215.7 million in Q1, up 9 percent compared to the year-ago period, or 12 percent on a currency-neutral basis. Growth in this segment was primarily due to sales of cell biology, food safety, droplet digital PCR, and process media products.
During the quarter, Bio-Rad received US Food and Drug Administration clearance for its Droplet Digital PCR system along with an initial test for monitoring treatment response in chronic myeloid leukemia.
Also during the quarter, Bio-Rad acquired a "small company" through its life sciences segment that will expand its suite of genomic reagent offerings, Bio-Rad executives said in a conference call recapping Q1 earnings.
"We acquired a novel technology for a genomic reagent application, and right now we're kind of heads down focused on getting the products transferred into our manufacturing plants," Annette Tumolo, executive vice president and president of the life sciences group, said during the call. "We plan to launch probably in the fourth quarter of this year, and will have more to say about it closer to launch."
Clinical diagnostics segment sales were $334.1 million in Q1, down 5 percent compared to the year-ago period, or down less than 1 percent on a currency-neutral basis. Sales in this segment were positively affected by autoimmune and blood typing products.
During the conference call, Bio-Rad CFO and EVP Ilan Daskal noted that revenues in the first quarter of 2018 included a royalty settlement of approximately $6 million within the diagnostics segment. Last year's first quarter also included about $6 million in sales from digital PCR firm RainDance Technologies (which Bio-Rad acquired in 2017), compared to about $1 million in Q1 2019.
"If we exclude the RainDance reduction of sales and the royalty settlement in Q1 of 2018, we estimate that currency-neutral sales growth for Q1 of 2019 was about 6 percent," Daskal said.
In clinical diagnostics specifically, excluding last year's difficult compare due to the royalty settlement, the segment grew about 1 percent year over year on a currency-neutral basis, Daskal added.
Bio-Rad's Q1 net income was $865.2 million, or $28.74 per share, compared to a net income of $656.8 million, or $21.77 per share in Q1 2018. On an adjusted basis, EPS was $1.65, beating analysts' consensus estimate for EPS of $1.10.
Net income for Q1 2019 and 2018 were significantly and favorably impacted by the recognition of changes in the fair market value of equity securities of about $1.06 billion and $815.9 million, respectively, primarily related to the holdings of Bio-Rad's investment in Sartorius. In addition, Q1 2019 was favorably impacted by the declaration of $15.7 million of dividends from the Sartorius investment, which have been historically declared in the second quarter of each fiscal year, Bio-Rad said.
Bio-Rad's Q1 R&D spending dipped 4 percent to $47.6 million from $49.4 million a year ago, while its SG&A expenses fell 1 percent to $207.6 million from $209.1 million.
Bio-Rad finished the quarter with $455.9 million in cash and cash equivalents and $408.7 million in short-term investments.
Daskal noted during the earnings call that Bio-Rad is on track with its previously provided guidance of currency-neutral revenue growth of approximately 4 percent to 4.5 percent for full year 2019.
In Thursday morning trading on the New York Stock Exchange, Bio-Rad's shares were up about 6 percent to $315.01.
