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Bio-Rad's Q1 Nearly Flat on European Softness

NEW YORK (GenomeWeb News) – Bio-Rad Laboratories reported after the close of the market on Tuesday that first quarter revenues were nearly flat year over year, as the company missed consensus Wall Street estimates on the top and bottom line.

For the three months ended March 31, revenues totaled $486.3 million, up a fraction of 1 percent from $485.1 million a year ago. Analyst estimates had revenues for the quarter at $492.4 million.

On a currency-neutral basis, revenues rose around 1 percent year over year, the company said.

On a conference call following the release of its results, Bio-Rad CFO Christine Tsingos said the firm saw growth across many of its key markets and market areas, but Europe continued to be soft and sales there were down from the year-ago period.
The Life Science segment saw an increase in sales of a fraction of 1 percent year over year to $154.8 million, or nearly 1 percent on a currency-neutral basis. The segment saw "good growth" in Japan and Asia-Pacific during the quarter, but struggled in the US and Europe against the year-ago period, Tsingos said.

The segment benefitted from sales of electrophoresis, imaging, and western blot products and application reagents, as well as new products including the V3 Western Workflow system and the QX100 Droplet Digital PCR system — acquired when Bio-Rad bought QuantaLife in the fall — which saw "rapid customer acceptance" in the quarter, the company said.

Tsingos said that QuantaLife contributed $1.7 million in sales to Bio-Rad during the quarter.

During the fourth quarter earnings conference call, company officials had said that the digital PCR business is anticipated to generate $20 million in sales for full-year 2012 with the most of it back-end loaded. Today, they reiterated that forecast.

Clinical Diagnostics sales were flat during the first quarter at $327.2 million, and up nearly 2 percent on a currency-neutral basis. The segment was impacted by a one-time sale of blood typing products in Japan in the year-ago period of almost $8 million. Excluding this, Clinical Diagnostics would have been up about 4 percent year over year on a currency-neutral basis.

Bio-Rad's Group Manager of the Clinical Diagnostics Group, John Goetz, said on the call that during the quarter the company saw a soft market in Europe across most of its product lines, in particular in blood typing and blood virus testing.

The firm's R&D spending was up 24 percent to $52.9 million from $42.7 million a year ago, driven by the QuantaLife deal and the development of new instruments for blood typing, diabetes monitoring, and the blood virus testing market. Its SG&A costs were $171.3 million, up 2 percent from $167.8 million.

Bio-Rad's net income for the quarter was $31.0 million, or $1.09 per share, compared to $33 million, or $1.16 per share, a year ago. Wall Street had estimated EPS at $1.11.

The company said it recorded $7.7 million in operating losses from its QuantaLife purchase, as well as an indirect tax in Brazil for the periods 2007 through 2011 totaling $6.1 million.

Bio-Rad had $533.8 million in cash and cash equivalents and $273.2 million in short-term investments at the end of the quarter.

The company reiterated top line, currency-neutral, organic growth in the range of 3.5 percent and 4.5 percent for full-year 2012.

Early last month, company Founder David Schwartz passed away at age 88. Following his death, speculation sprouted that the company could be looking to get acquired. Today, his son Norman Schwartz, the current president and CEO of Bio-Rad, called the rumors "very misguided" and the people who started them "extremely misinformed."

"We intend to continue," he said.

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