Bio-Rad Labs cuts annual revenue forecast on weak demand for diagnostics products
Aug 1 (Reuters) -Bio-Rad Laboratories BIO.N cut its annual revenue growth forecast on Thursday, dragged down by weak demand for clinical diagnostics products from biotech clients.
Shares of the diagnostics company fell 20% after the bell.
Bio-Rad expects its full-year 2024 adjusted revenue to decline by about 2.5% to 4% on a currency-neutral basis, compared to its previous estimate of 1.0% to 2.5%.
"We continue to experience constraints in biotech and biopharma customer spending and, as a result, expect a more modest pace of market recovery than originally anticipated," said CEO Norman Schwartz.
The company sells laboratory apparatus, instruments, diagnostics to drug manufacturers, biotechs and food testing clients.
Like contract drug manufacturers, suppliers of lab instruments to biotechs have seen sluggish demand as cash-strapped drug developers remain wary of spending amid multi-decade-high interest rates.
The public funding environment for early-stage biotechs is expected to improve in the second half of 2024, on hopes of interest rate cuts from the U.S. Federal Reserve in September.
Some analysts have noted that funding for biotechs could stabilize in near future as a higher number of regulatory approvals was offered to these companies in 2023.
Peer Waters Corp WAT.N, in July, also lowered annual profit forecast, anticipating lower demand for its products and services used in drug development and research.
Sales from Bio-Rad's life science unit fell 16.5% to $250.5 million during the quarter, hurt by ongoing weakness in the biotech and biopharma end-markets.
The company reported second-quarter revenue of $638.5 million, missing analysts' estimate of $645.8 million, according to LSEG data.
On an adjusted basis, Bio-Rad recorded a profit of $3.11 per share in the quarter ended June, aboveanalysts' estimate of $2.01.
Reporting by Sruthi Narasimha Chari and Sneha S K in Bengaluru; Editing by Mohammed Safi Shamsi
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
