Bio-Rad Holds Sales Flat as Diagnostics Offset Life Science
Adjusted earnings came to $2.62 a share as operating profit declined.
Bio-Rad Laboratories (BIO), a life-science research and clinical diagnostics company, held second-quarter sales nearly flat as an improving overall trajectory masked deeper weakness in its Life Science business. Net sales were $651.0 million, compared with $651.6 million a year earlier, while currency-neutral sales fell 1.9%.
The currency-neutral decline narrowed from 4.2% in the first quarter, though it followed 1.7% growth in the fourth quarter of 2024. Revenue rose $58.9 million, or about 10%, sequentially from $592.1 million, but remained below the fourth quarter’s $693.2 million.
Net income increased to $371.4 million, or $13.85 a diluted share, from $317.8 million, or $11.67 a share, largely because of changes in the value of Bio-Rad’s Sartorius investment. That marked a reversal from the first quarter’s Sartorius-related net loss of $527.1 million, or $19.55 a share. Adjusted net income slipped to $70.2 million from $71.0 million, while adjusted earnings were nearly unchanged from $2.61 a share a year earlier.
Life Science sales fell 4.1% to $252.0 million, with a 5.1% currency-neutral decline that deepened from contractions of 4.3% in the first quarter and 4.0% in the fourth quarter. Process chromatography accounted for much of the pressure: excluding that business, segment revenue rose 0.9% as reported and declined 0.3% currency-neutral. Digital PCR instrument revenue grew more than 20%.
Clinical Diagnostics sales rose 2.6% to $399.0 million and increased 0.3% currency-neutral, improving from a 4.1% currency-neutral decline in the first quarter while slowing from 5.6% growth in the fourth quarter. Quality systems, diabetes and blood-typing products drove the increase, partly offset by infectious-disease products. Europe, the Middle East and Africa returned to growth as Middle East distributors restocked following conflict-related weakness in the prior quarter.
GAAP gross margin widened to 53.1% from 52.3% in the first quarter and 53.0% a year earlier, but operating income fell 5.8% to $72.6 million and operating margin narrowed to 11.2% from 11.8%. Operating cash flow declined to $98.7 million from $116.5 million a year earlier, while free cash flow fell to $66.7 million from $70.8 million.
Bio-Rad reaffirmed its 2024 outlook for currency-neutral revenue ranging from a 3.0% decline to 0.5% growth and adjusted operating margin of 10.0% to 12.0%. Those ranges preserved the lowered forecast issued after the first quarter, when the company cut its earlier revenue-growth and margin expectations. Bio-Rad repurchased about $32 million of shares during the quarter, bringing first-half purchases to $79.3 million, down from $242.1 million a year earlier.