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Bio-Rad's Q3 Revenues Increase 2 Percent amid 'Weak' Markets

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Bio-Rad Laboratories reported after the close of the market Tuesday a 2 percent increase in its third-quarter revenues year over year, falling short of analysts' consensus estimate.

The Hercules, Calif.-based life sciences and diagnostics products firm brought in total revenues of $471.5 million for the three months ended Sept. 30, compared to revenues of $461.1 million for the third quarter of 2009. Analysts had expected revenues of $476.7 million.

On a currency-neutral basis, the firm's revenues were up around 5 percent, the firm said.

Sales for Bio-Rad's life science segment increased 2 percent to $153.2 million, while sales for its clinical diagnostics segment were also up around 2 percent at $314.9 million. The sales include a $13.6 million contribution from the Biotest business, which Bio-Rad acquired in the first quarter of 2010.

Bio-Rad said in a statement that in its life sciences segment European sales "continue to lag due to weak economic conditions facing government-funded research." However, it also said that the segment benefitted from strong sales for its next-generation PCR instruments.

"As far as Europe goes, we have seen considerable weakness, and even in some of the emerging markets as well," Brad Crutchfield, VP and group manager of the life sciences group, said during a conference call following the release of the results. "We've had particular slowness in Northern Europe, but obviously the Southern European economies are tough."

He also said that the British government's recent announcement regarding austerity measures "gives some concern going forward as far as research spending goes." Crutchfield added that some of the weakness is offset by pharmaceutical spending. "I don't see a tremendous amount of change in Europe going forward," he said.

The firm's clinical diagnostics business was "negatively affected by economic challenges impacting healthcare markets in the U.S. and Europe as well as certain sales in 2009 that did not recur in 2010," it said in the statement.

"Organic growth during the quarter was tempered somewhat by a challenging economic environment in Europe as well as the comparison to last year, when the third quarter included sales from the newly acquired Diamed distributor business in Japan as well as some tender-related sales," Bio-Rad CFO Christine Tsingos said on the call.

Bio-Rad posted net income of $44.8 million, or $1.59 per share, versus net income of $38.5 million, or $1.38 per share, for Q3 2009.

The firm's R&D spending for the quarter rose around 9 percent to $42.9 million from $39.5 million. Its SG&A expenses fell 3 percent to $148.7 million from $153.6 million, which was somewhat surprising because company officials had said a few months ago that they expected SG&A expenses to rise in Q3.

Bio-Rad finished the quarter with $630.6 million in cash and cash equivalents and $107.4 million in short-term investments.

The firm expects organic revenue growth for full-year 2010 to be in the 4 percent to 5 percent range, slightly off its guidance from the beginning of the year, when the firm said that it anticipated organic revenue growth of 5 percent. Tsingos also said during the call that the firm expects to report fourth-quarter sales of between $510 million and $520 million.

In early Wednesday trade on the New York Stock Exchange, shares of Bio-Rad were up 1 percent at $93.70.

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