Reminiscent of a year ago, August proved to be a depressed month for global equity prices. Spurred by increased economic fears, the Dow Jones Industrial Average, S&P 500 and NASDAQ fell 4.4%, 5.7% and 6.4% for the month, respectively. Year to date, the Dow has gained 0.3%, while the S&P 500 and NASDAQ are down 3.1% and 2.8%, respectively.

All four IBO Indexes contracted along with the major equity markets. For the month, the Diversified Instrumentation, Laboratory Instrumentation, Process/Metrology/Motion Instrumentation and Lab Consumables/Equipment Stock Indexes declined 7.0%, 6.1%, 5.6 % and 3.5%, respectively.

Laboratory Instrumentation Stock Index

In August, the Laboratory Instrumentation Index fell 6.1% to 635.47, with 17 companies trading lower, three up and one unchanged. Pressure BioSciences recorded the largest gain, climbing 19%, while Pacific Biosciences declined 36% and 55% for the month and year, respectively. Year to date, the Index is down 3.7%. Twelve firms have lower returns and nine are in positive territory. Transgenomic is up 120%.

On August 2, Becton Dickinson (BD) raised its full-year EPS outlook by 1% to $5.65–$5.70 due to currency gains. On the same day, Caliper Life Sciences elevated its full-year EPS guidance to $0.02–$0.06 from a loss of $0.03–$0.05, leading shares up 3.4% the next day. On August 4, PerkinElmer raised its full-year EPS guidance by 1% to $1.64–$1.68. Shares climbed 5.2%. Luminex raised its full-year revenue outlook on August 8 (see IBO 8/15/11), leading shares up 33.1% the following day. On August 9, Fluidigm projected full-year product sales to grow towards the top end of its previous 27%–30% forecast, yet shares fell 6.2% the next day.

MOCON and Pacific Biosciences reported strong second-quarter results on August 4. MOCON posted 24% revenue growth (see page 12) and higher EPS, yet shares fell 1.7%. Pacific Biosciences narrowed its EPS loss (see page 12). Shares fell 34.3% the following day. Transgenomic reported on August 11 a second-quarter profit, excluding preferred stock expenses, leading shares up 8.1% the next day. On August 12, Helicos BioSciences posted a narrower EPS loss.

Bio-Rad Laboratories fell short of EPS consensus on August 2. Shares slipped 1.5% the next day. Bruker missed EPS expectations on August 3, yet maintained its full-year Bruker Scientific Instruments EPS guidance of $0.90–$0.93 due to cost-cutting measures, currency and strong bookings. Sequenom reported on August 4 a wider-than-expected loss, sending shares down 8.0% the next day. On August 15, Pressure BioSciences announced a larger EPS loss and a 53% decline in revenues. Shares fell 8.5%. X-Rite fell 7.5% on August 4 after reporting results. On August 8, Accelrys lowered its full-year EPS outlook by $0.01 to $0.32–$0.34, yet shares jumped 16.8% the following day. Harvard Bioscience reported on August 4 flat EPS growth. Shares slipped 2.7%.

Illumina announced on August 3 a new $100 million share repurchase program. Thermo Fisher Scientific announced on August 9 that it would issue $2.1 billion in senior notes to help finance the purchase of Phadia (see IBO 5/31/11), which was completed on August 23. JPMorgan downgraded Pacific Biosciences on August 5 from “Buy” to “Hold” and cut its price target by 59% to $10 a share. On August 8, Leerink upgraded Bruker to “Outperform” from “Market Perform.” The next day, BD was downgraded by Goldman Sachs from “Buy” to “Neutral.” On August 12, BD was upgraded by Mizuho to “Outperform” from “Neutral.” Waters was upgraded by Auriga on August 15 from “Hold” to “Buy” and received an initial “Neutral” recommendation from Madison Williams on August 18. On August 26, Mizuho initiated coverage of Affymetrix with an “Outperform” rating. On the same day, William Blair set an initial “Outperform” rating on Sequenom.

Process/Metrology/Motion Instrumentation Stock Index

In August, the Process/Metrology/Motion Instrumentation Stock Index contracted 5.6% to 463.06. Five companies lost ground, but Zygo rose 10%. SDIX lost the most value, falling 10%. The Index has gained 2.9% for the year. Four firms have positive returns and two are down. Nanometrics leads the Index, having risen 24%. Veeco Instruments is down 15%.

FEI on August 2 projected EPS of $0.51–$0.57 for the third quarter. Shares jumped 8.2% the following day. The firm rose 2.7% on August 15 after the disclosure that Blue Harbour Group had acquired a 6% stake in it. On August 4, MTS Systems modestly raised the sales growth outlook for the year. Shares declined marginally the next day. On August 25, the company announced a 25% dividend increase to $0.25 a share and the resignation of its CEO (see page 2). Shares slipped 1.9%. Zygo easily beat fiscal fourth-quarter EPS on August 18, sending shares up 2.9% the next day.

Veeco received an initial “Perform” rating and $45 price target from Oppenheimer on August 5. It also received an initial “Buy” recommendation and $52.50 price target from Ticonderoga on August 19. Morgan Stanley initiated coverage of the company on August 24 with an “Equal Weight” rating. On August 11, Stifel Nicolaus initiated coverage of Nanometrics with a “Buy” rating and a $22 price target.

Lab Consumables/Equipment Stock Index

The Laboratory Consumables/Equipment Stock Index fell 3.5% to 577.08 in August. Six companies posted negative returns and Pall was up 3%. Enzo Biochem recorded the largest declines for both the month and year, dropping 24% and 45%, respectively. For the year, the Index is down 7.8%. Five companies are trading lower and two have advanced. Techne leads the Index, having climbed 10%.

Techne popped 4.5% on August 2 after announcing results. Kewaunee Scientific reported on August 24 a decline in fiscal first-quarter EPS due to higher material costs. Shares improved 2.6% Wedbush upgraded Pall on August 12 to “Outperform” from “Neutral.” On August 16, RBC Capital upgraded Life Technologies to “Outperform” from “Sector Perform.” On August 26, Oppenheimer noted that the company was significantly undervalued, lifting shares 2.8%.

Diversified Instrumentation Stock Index

For the month, the Diversified Instrumentation Stock Index retreated 7.0% to 125.96. Five firms declined, led by Agilent Technologies, which fell 13%, and two increased. Year to date, the Index is down 6.1%. Four companies have lost value and three have advanced. Teledyne Technologies has risen 24%, while Illinois Tool Works (ITW) has declined 13%.

On August 15, Agilent lowered its full-year EPS guidance by 2% to $2.84–$2.88. The company projected fiscal fourth-quarter EPS of $0.79–$0.81, which was below analysts’ expectations of $0.81. Shares declined 2.3% the next day. ITW was downgraded by ISI Group on August 2 from “Buy” to “Hold” and by Goldman Sacks on August 9 from “Neutral” to “Sell.” On August 15, Standpoint Research initiated coverage of the firm with an “Accumulate” recommendation and a $55 price target. On August 18, Macquarie initiated coverage of Danaher with an “Outperform” rating.

International

In August, all five Pacific Region companies traded lower, led by Shimadzu, which slumped 17%. Year to date, four firms have dropped in value and HORIBA is up 8%. Hitachi High-Technologies has fallen 24%.

On August 3, Shimadzu announced a widened fiscal first-quarter net loss, leading shares down 2.6%. The following day, HORIBA reported second-quarter EPS grew 31% to ¥49.97 ($0.62). The company increased its 2011 net income forecast by 6% to ¥8.5 billion ($104 million) and raised its projected dividend by 36% to ¥30 ($0.37) per share. On August 11, Techcomp reported a 60% decline in EPS to $0.25 for the first half of the year. Shares fell 4.0%.

This month, 10 European companies fell, three improved and one was unchanged. Sartorius fell 19% and Tecan increased 2%. Year to date, eight European companies have positive returns, five have traded lower and one is unchanged. Exiqon maintains the largest increase, up 24%. Biotage has surrendered 19% of its value.

Biohit reported on August 18 a second-quarter EPS loss of €0.01 ($0.01), compared to a gain of €0.01 ($0.01). Shares climbed 13.0% the following day. On the same day, Renishaw reported full-year EPS growth of 178% to £0.88 ($1.41), yet shares fell 7.3%. On August 11, Analytik Jena reported an EPS fiscal third-quarter loss of €0.04 ($0.06), compared to a profit of €0.10 ($0.13). On August 18, Tecan reported six-month EPS grew 45% to CHF 2.17 ($2.60) from continuing operations (see page 12). Shares jumped 13.8%. On August 17, Biotage announced a second-quarter EPS decline of 85% to SEK 0.05 ($0.01). Exiqon reported on August 11 a 6% wider second-quarter EPS loss to DKK 0.36 ($0.07) but maintained its EBITDA break-even range for the year. Shares slipped 1.8%. On August 22, Spectris reported adjusted EPS growth of 71% to £0.50 ($0.80) (see page 12). Shares jumped 7.3% the next day. On August 12, Halma reported the repurchase of 820,579 shares, leading shares up 3.1%.

 Line Graph: IBO Instrument Industry Stock Index

        Lab Instrument Stock Index     S&P 500 

 Aug-09 528.47                         244.70

 Sep-09 543.19                         253.44

 Oct-09 535.42                         248.43

 Nov-09 548.41                         262.68

 Dec-09 565.94                         267.35

 Jan-10 546.93                         257.47

 Feb-10 566.22                         264.81

 Mar-10 585.87                         280.38

 Apr-10 596.47                         284.51

 May-10 557.61                         261.19

 Jun-10 531.11                         247.12

 Jul-10 513.20                         264.12

 Aug-10 499.94                         251.58

 Sep-10 556.95                         273.61

 Oct-10 579.40                         283.69

 Nov-10 589.00                         283.04

 Dec-10 660.07                         301.53

 Jan-11 657.02                         308.36

 Feb-11 661.02                         317.14

 Mar-11 661.90                         317.88

 Apr-11 703.32                         326.93

 May-11 721.22                         322.52

 Jun-11 712.55                         316.63

 Jul-11 676.63                         309.83

 Aug-11 635.47                         292.24

 2011                                       2010

 Cos.       Date Rept. FQ     Adj. EPS   Consensus   Vs. Est.    Grw.     Adj. EPS

 Laboratory Instrumentation   

 ACCL       8-Aug      2Q      $0.08      $0.08      $0.00       60%       $0.05 

 BDX        2-Aug      3Q      $1.51      $1.43      $0.08       17%       $1.29 

 BIO        2-Aug      2Q      $1.41      $1.47     -$0.06       14%       $1.24 

 BRKR       3-Aug      2Q      $0.19      $0.21     -$0.02       27%       $0.15 

 CALP       2-Aug      2Q      $0.02     ($0.02)     $0.04        NA      ($0.00)

 FLDM       9-Aug      2Q     ($0.21)    ($0.22)     $0.01       13%      ($0.24)

 HBIO       4-Aug      2Q      $0.06      NA           NA         0%       $0.06 

 HLCS      12-Aug      2Q     ($0.02)     NA           NA        67%      ($0.06)

 LMNX       8-Aug      2Q      $0.11      $0.06      $0.05      450%       $0.02 

 MOCO       4-Aug      2Q      $0.22      NA           NA        10%       $0.20 

 PACB       4-Aug      2Q     ($0.42)    ($0.62)     $0.20       31%      ($0.61)

 PBIO      15-Aug      2Q     ($0.41)    ($0.37)    -$0.04      -17%      ($0.35)

 PKI        4-Aug      2Q      $0.42      $0.40      $0.02       11%       $0.38 

 SQNM       4-Aug      2Q     ($0.21)    ($0.17)    -$0.04       16%      ($0.25)

 TBIO      11-Aug      2Q      $0.01      NA           NA         NA      ($0.02)

 XRIT       4-Aug      2Q      $0.10      $0.10      $0.00      400%       $0.02 

 Process/Metrology/Motion Instrumentation  

 FEIC       2-Aug      2Q      $0.62      $0.60      $0.02      182%       $0.22 

 MTSC       4-Aug      3Q      $0.69      $0.69      $0.00        NA       $0.00 

 ZiGO      18-Aug      4Q      $0.26      $0.10      $0.16        NA      ($0.33)

 Lab Consumables/Equipment   

 KEQU      24-Aug      1Q      $0.01      NA           NA       -96%       $0.25 

 TECH       2-Aug      4Q      $0.85      $0.77      $0.08       23%       $0.69 

 Diversified Instrumentation   

 A         15-Aug      3Q      $0.77      $0.73      $0.04       43%       $0.54

                                  Market Value    52 Week       Price    Change Change       EPS     EPS   LTD/    FY   R&D/

 Company:  Exchange                (US $000s)   Low    High   8/31/2011  1Month  YTD   P/E 12Month    FY  Equity  ROE   Sales

 Laboratory Instrumentation            

 Accelrys: o                        $364,325   5.97    8.95     $6.50     -11%  -22%   N/A  -0.48  -0.44    5%    N/A    28%

 Affymetrix: o                      $389,222   4.04    8.16     $5.60      -1%   11%   280   0.02  -0.15   38%    N/A    22%

 Becton, Dickinson and Company:n $18,193,882  68.07   89.75    $81.38      -3%   -4%    15   5.38   4.94   69%    24%     6%

 Bio-Rad Laboratories: n          $2,859,188  85.88  126.98   $100.34      -8%   -3%    15   6.57   6.59   51%    12%     9%

 Bruker: o                        $2,366,449  11.91   21.65    $14.23     -17%  -14%    26   0.55   0.58   27%    23%    11%

 Caliper Life Sciences: o           $394,176   3.31    8.68     $7.52      -8%   19%   N/A  -0.17   0.08   13%     5%    15%

 Cepheid: o                       $2,407,301  14.60   40.98    $36.26      -4%   59%   907   0.04  -0.10    6%    N/A    20%

 Fluidigm: o                        $269,463  11.64   20.20    $13.49     -20%   -4%   N/A  -4.91  -8.94    9%    N/A    39%

 Harvard Bioscience: o              $131,917   3.34    6.26     $4.37     -14%    7%     7   0.61   0.65   23%    21%     4%

 Helicos BioSciences: o              $13,229   0.06    0.67     $0.16       3%   29%     0   0.87   0.87   69%    10%    20%

 Illumina: o                      $7,385,957  42.60   79.40    $52.10     -17%  -18%    60   0.87   0.87   69%    10%    20%

 Luminex: o                         $977,531  14.38   24.70    $23.03      13%   26%    89   0.26   0.12    4%     2%    17%

 MOCON: o                            $82,476  10.43   17.67    $14.77     -13%   14%    16   0.92   0.84    1%    16%     7%

 Pacific Biosciences: o             $378,168   5.20   17.47     $7.08     -36%  -55%   N/A -13.98 -14.10    3%    N/A    N/A

 PerkinElmer: n                   $2,598,558  20.71   28.75    $22.87      -7%  -11%    25   0.92   1.15   55%     7%     6%

 Pressure BioSciences: o              $2,558   0.62    2.29     $0.89      19%  -36%   N/A  -1.30  -1.35    2%    N/A    92%

 Sequenom: o                        $607,379   5.07    8.71     $6.13     -13%  -24%   N/A  -0.86  -1.69    6%    N/A    92%

 Thermo Fisher Scientific:     n $21,439,179  41.74   65.86    $54.93      -9%   -1%    21   2.63   2.53   42%     7%     3%

 Transgenomic: o                     $71,485   0.30    1.85     $1.45       0%  120%   N/A  -0.20  -0.04   62%    N/A    11%

 Waters: n                        $7,449,475  61.14  100.00    $79.87      -9%    3%    18   4.46   4.06   47%    36%     5%

 X-Rite: o                          $314,814   3.20    5.08     $3.66     -25%  -20%   523   0.01   0.04   79%     2%    11%

 Process/Metrology/Motion Instrumentation           

 FEI Company: o                   $1,361,686  16.83   41.56    $31.99      -3%   21%    16   1.99   1.34   18%     8%    10%

 MTS Systems: o                     $570,299  26.29   48.72    $36.12      -8%   -4%    13   2.82   1.14   10%    11%     4%

 Nanometrics: o                     $372,493  10.92   21.56    $15.89      -6%   24%     6   2.58   2.43   10%    33%    10%

 SDIX: o                             $39,612   1.53    3.13     $1.94     -10%   10%   N/A  -0.08  -0.05    1%    N/A    11%

 Veeco Instruments: o             $1,563,553  32.65   57.67    $36.36      -9%  -15%     6   5.93   6.13    0%    34%     1%

 Zygo: o                            $242,183   7.94   16.51    $13.16      10%    7%    13   1.05   1.05    3%    15%    10%

 Lab Consumables/Equipment            

 Enzo Biochem: n                    $112,356   2.59    5.83     $2.92     -24%  -45%   N/A  -0.38  -0.59    0%    N/A    10%

 Kewaunee Scientific: o              $23,865   8.38   14.25     $9.25      -7%  -32%    19   0.48   0.72   29%     6%     0%

 Life Technologies: o             $7,791,546  35.30   57.25    $42.00      -7%  -24%    22   1.95   1.99   68%     9%    10%

 Pall: n                          $6,070,307  33.82   59.50    $51.13       3%    3%    22   2.31   2.03   65%    20%     3%

 QIAGEN: o                        $3,720,793  13.99   22.20    $15.44      -9%  -21%    28   0.55   0.60   40%     6%    12%

 Sigma-Aldrich: o                 $7,984,360  52.39   76.16    $64.39      -4%   -3%    19   3.39   3.12   23%    19%     3%

 Techne: o                        $2,698,058  58.13   86.43    $72.47      -4%   10%    24   3.02   3.02    2%    19%     9%

 Diversified Instrumentation            

 Agilent Technologies: n         $13,162,590  27.43   55.33    $36.87     -13%  -11%    13   2.87   1.94   73%    20%    11%

 AMETEK: n                        $6,339,362  29.01   47.00    $39.08      -8%    0%    18   2.12   1.76   79%    16%     2%

 Danaher: n                      $31,819,580  35.91   56.09    $45.81      -7%   -3%    14   3.20   2.64   64%    13%     5%

 Illinois Tool Works: n          $23,356,611  40.80   59.27    $46.54      -7%  -13%    12   3.79   3.03   39%    16%     1%

 Mettler-Toledo Int'l: n          $5,258,122 108.12  193.56   $159.27       3%    5%    21   7.44   6.80  112%    30%     5%

 Roper Industries: n              $7,572,803  57.50   88.76    $76.95      -6%    1%    19   3.97   3.34   58%    12%     4%

 Teledyne Technologies: n         $2,036,207  35.76   55.37    $54.59       1%   24%     8   6.75   3.27   45%    15%     3%

 Laboratory Instrumentation Stock Index                        635.47    -6.1% -3.7%    20                 47%    10%     7%

 Process/Metrology/Motion Instrumentation                      463.06    -5.6%  2.9%     9                  8%    22%     5%

 Lab Consumables/Equipment Stock Index                         577.08    -3.5% -7.8%    22                 50%    12%     7%

 Diversified Instrumentation Stock Index                       125.96    -7.0% -6.1%    15                 59%    15%     4%

 Dow Jones Industrial Average                               11,613.53    -4.4%  0.3%      

 S&P 500                                                     1,218.89    -5.7% -3.1%      

 NASDAQ Composite                                            2,579.46    -6.4% -2.8%      

                                                               Price         

 Region                          Market Value  Market Value  8/31/2011   Change Change        EPS       EPS   LTD/   FY  R&D/

 Company                          (US $000s)   (Local 000s)   (Local)   1 Month  YTD   P/E  12Month      FY  Equity ROE Sales

 Pacific Shares             

 Hitachi High-Technologies: t     $2,601,427   ¥199,022,692     ¥1447     -13%  -24%   12   ¥118.20   ¥129.07  11%   7%   3%

 HORIBA: t                        $1,376,475   ¥105,307,523     ¥2490      -3%    8%   12   ¥205.36   ¥187.11  17%   9%   8%

 JEOL: t                            $232,375    ¥17,777,894      ¥224      -9%  -21%   64     ¥3.51     ¥3.51  93%   1%   5%

 Shimadzu: t                      $2,303,995   ¥176,267,596      ¥596     -17%   -6%   17    ¥35.00    ¥36.00   0%   6%   3%

 Techcomp: si                        $69,593     SGD 83,700  SGD 0.36     -15%  -14%    7     $0.04     $0.04   9%  18%   0%

 European Shares             

 Halma: l                         $2,137,297     £1,309,889     £3.48     -14%   -3%   18     £0.19     £0.19  46%  20%   5%

 Oxford Instruments: l              $676,693       £414,726     £8.18     -17%   16%   13     £0.64     £0.64  28%  34%   7%

 Renishaw: l                      $1,674,605     £1,026,318    £14.10     -16%   15%   16     £0.90     £0.90  35%  33%  10%

 Scientific Digital Imaging: l        $3,953         £2,423     £0.14       0%  -10%   12     £0.01     £0.01   0%  N/A   5%

 Spectris: l                         $27,171     £1,665,204    £14.38      -8%   10%   15     £0.99     £0.82  32%  19%   8%

 Alpha MOS: c                        $10,027        € 6,939    € 2.65      -8%    0%  N/A   -€ 0.14   -€ 0.14  11%  N/A  N/A

 Analytik Jena: g                    $65,453       € 45,296    € 8.72       1%    4%  N/A   -€ 0.04    € 0.34  55%   5%  10%

 Biohit: h                           $42,624       € 29,498    € 2.28      -4%    9%  N/A   -€ 0.01    € 0.00  69%   2%   6%

 CyBio: g                             $7,485        € 5,180    € 1.03       1%    2%    7    € 0.14    € 0.14   2%  13%   6%

 Sartorius: g                       $642,385      € 444,557   € 29.80     -19%    6%   11    € 2.67    € 2.29  93%  12%   6%

 Tecan: s                           $959,514    CHF 774,915  CHF 67.9       2%  -13%   13  CHF 5.10  CHF 4.43   5%   7%  10%

 Datacolor: s                        $76,499     CHF 61,781 CHF 388.0      -8%  -11%   12 CHF 31.05 CHF 29.26   5%   0%   9%

 Biotage: st                            $678      SEK 4,300   SEK 5.4     -19%  -19%  N/A -SEK 5.19 -SEK 4.91   6%  N/A   9%

 Exiqon:  no                         $80,097    DKK 413,024  DKK 11.8      -9%   24%  N/A -DKK 1.30 -DKK 1.28   4%  N/A  32%