Bio-Rad Laboratories, Inc.(NYSE: BIO) stock crashed over 10.9% in the after-hours session on August 3rd, 2017 (As of 5:44PM EDT; Source: Google finance) post their weak performance and guidance. But the stock generated over 32.9% in this year to date.
The group’s net sales lost 2.3% yoy to $504.7 million in Second-quarter of 2017 hurt by a slowdown in productivity related to the recent golive of their global ERP system in Western Europe and the absence of sales that were pulled forward into the first quarter in anticipation of their ERP deployment. The Life Science segment net sales lost 0.3% yoy to $179.4 million in the second quarter of 2017 due to declining in process chromatography media sales, as well as some of the ERP-related disruption. But Life Science segment witnessed rise from the acquisition of RainDance Technologies. The currency neutral sales rise was seen in North America, China, and Asia Pacific, which offset Europe, Latin America and Japan weakness.
Net sales for the Clinical Diagnostics segment lost 3.5% yoy to $322.1 million, during the quarter while on a currency-neutral basis, the sales lost 2.7% on a yoy basis. European sales pressure mainly from infectious disease and immunohematology products, directly related to the disruptions post go-live of the new ERP system contributed to the weakness. Accordingly, weak Americas performance, offset decent Asia performance. Net income fell to $5.0 million, or $0.17 per share on a fully diluted basis for the second quarter of 2017 against $18.0 million, or $0.61 per share in prior corresponding period. Weak sales and consequently lower gross profit coupled with rising acquisition-related expenditures for new products and technology and higher expense for the implementation of new systems and operations in Europe contributed to this performance. But management sees that their investments would lead to better sales and margin expansion in the long term
On the other hand, for the full year 2017, the group expects a weak currency-neutral organic sales growth of over 4% as major portion is the lower revenue on the back of the transition to a new ERP system which would be recovered by the end of the year. But, their recent RainDance Technologies acquisition could add up to another 1 percent of growth in sales for the full year. Given the lower than expected operating profit in the first half of 2017 they cut their estimate for currency-neutral operating profit for the full year as compared to their earlier reported 7 percent of sales which is currently in the 6 to 6.5 percent range.