In the calendar-year fourth quarter, major, publicly held US instrument companies posted steady growth. In general, US academic and government sales improved from the third quarter but remained slow, according to several companies. The surprise of the quarter was Europe, for which a number of firms reported sales growth.

For the eight businesses whose results are reported on pages 9 to 11, total quarterly sales increased 11.4%. Adjusted for one-time events, organic sales grew 5.2%. On a reported basis, four companies reported double-digit growth, led by Thermo Fisher Scientific Analytical Technologies (AT). Two businesses reported double-digit organic revenue growth: the combination of Agilent’s Life Science (LS) and Chemical Analysis (CA) Groups, and Bruker Scientific Instruments (BSI). One company, Illumina, showed a decline in sales.

Quarterly operating profit rose 22.9% for the eight businesses due to gains related to cost controls, price increases and higher margins and acquisitions. Five businesses reported double-digit increases in operating profits, including three with gains of more than 30%. Bio-Rad Life Sciences (LS) and BSI reported operating losses for the quarter.

Industrial and applied markets remained strong during the quarter. Agilent CA and Waters each reported strong sales for food testing. Waters, Agilent LS and Thermo AT noted good sales growth in the pharmaceutical market. Downstream, Thermo AT and Life Technologies reported strong growth for their respective BioProcess Production and BioProduction units. However, Life Technologies and Thermo AT reported continued weak spending by the US academic end-market, although Thermo AT and Illumina reported sequential sales increases to the market.

Despite tighter budgets in the US, sequencing continues to be a bright spot in the life science market. Sales of next-generation low-cost sequencers drove growth at Life Technologies and Illumina. Agilent LS and Waters each noted good growth for HPLC sales, specifically for sales of UHPLC systems, citing a replacement cycle. Both companies, as well as Thermo AT, also reported strong growth for MS sales.

Geographically, Asia was the strongest region for most companies. European sales were strong for PerkinElmer and Waters, but declined for Bio-Rad LS. US sales were flat for Agilent CA and PerkinElmer. However, Agilent LS and Waters each reported strong European pharmaceutical demand.

Combined annual sales for the seven businesses with calendar year-ends increased 13.5%. Organically, 2011 sales grew 6.1%. Four companies reported double-digit revenue growth on a reported basis, led by BSI. Illumina was the only company to record double-digit organic sales growth. Annual operating profits for the seven businesses increased 15.8%. Bio-Rad LS posted an operating loss due to an acquisition. Sales forecasts for 2012 for the seven businesses ranged from mid- to upper single digits, with a continuation of current end-market conditions.

Information presented on pages 9–11 is based on company financial reports, SEC filings and conference calls.

Fiscal first-quarter organic revenues for Agilent Technologies Life Sciences (LS) and Chemical Analysis (CA) grew 11% and 7%, respectively (see page 12), excluding delayed Varian orders of $30 million in the previous year. For the combined segments, LC sales grew in the high single digits and MS sales grew in the double digits. Pharmaceutical and biotech sales climbed 18% to make up 16% of Agilent sales, academic and government revenues grew 7% to account for 7%, and chemical and energy sales grew in the high single digits, including 14% growth for petrochemicals, to make up 13%. Forensics and environmental sales grew in the mid-teens to represent 10% of sales, and food sales grew 14% to make up 6%. LS and CA adjusted operating income climbed 37.5% and 35.4% to $66 million and $88 million, respectively, due to cost synergies. Combined LS and CA sales are anticipated to grow 7% for the remainder of the fiscal year.

Within LS, sales to the Americas and Asia Pacific each grew in the double digits to account for 37% and 30% of LS sales, respectively. European sales rose in the high single digits to represent 33%.

CA Sales to the Americas and Asia Pacific grew in double digits to represent 31% and 39% of segment sales, respectively. European sales were flat to account for 30%.

Fourth-quarter sales for Bio-Rad Laboratories Life Sciences (LS) rose 3.1%, 2.3% excluding currency, to $198.9 million to account for 36% of sales (see page 12). Sales growth was driven by sales of new real-time PCR and imaging products, as well as demand in Asia Pacific and the Americas. European sales fell as a result of lower academic spending. Adjusted operating profit declined 2.4% to $20.1 million due to the purchase of QuantaLife (see IBO 10/15/11), but was partially offset by lower operational expense.

Full-year LS revenue grew 7.2%, 3.4% on a currency-natural basis, to $694.7 million, or 34% of company sales. Revenue growth benefited from higher sales of electrophoresis, imaging and gene expression products. LS adjusted operating profit slipped 10.6% to $45.7 million. Total full-year 2012 sales are projected to grow 3.5%–4.5% before currency, including roughly $20 million from digital PCR sales.

Bruker Scientific Instruments’ (BSI) revenue grew 14.5%, 12.3% organically, to $445.8 million (see page 12). Excluding deferred NanoSurface revenue, BSI revenue grew 9% organically. Adjusted operating profit fell 4.7% to $62.4 million due to higher operating expenses. Adjusted gross profit margin fell 250 basis points to 48.3% of BSI sales.

Full-year BSI sales increased 26.9%, 8.6% organically, to $1,554.1 million. Acquisitions and currency contributed 12.2% and 6.1% to sales growth, respectively. The BioSpin, Materials, Daltonics and Optics divisions contributed 38%, 32%, 21% and 9% to sales, respectively. Sales to academic markets, and industrial and applied markets, accounted for 54% and 30% of sales, respectively. Biopharmaceutical and government sales each accounted for 8% of sales. Revenues from nonacademic and nongovernment-related markets expanded from 36% to 38% of sales. With strong double-digit growth in China and Japan, Asia-Pacific accounted for 30% of BSI sales. Europe, the Americas and Other made up 41%, 23% and 6% of sales, respectively. BSI adjusted operating profit rose 8.2% to $200.3 million. Adjusted gross profit margin slipped 40 basis points to 48.8% of sales. Bruker 2012 revenues are expected to grow 7%–10% on a currency-neutral basis to $1.76–$1.81 billion. First-quarters sales are estimated to be $380–$390 million. CAM sales are expected to grow more than 20% to over $100 million, with an adjusted operation loss of $9–$10 million. CAM is forecast to break even in 2013.

In the fourth quarter, Illumina’s revenues fell 4.3% to $250.1 million. Product revenue declined 6.2% to account for 92% of sales. Service revenue grew 25.5%, as the company shipped 900 complete human genomes. Instrument sales contracted 27% to $80 million but grew 11% sequentially due to MiSeq. Consumables sales improved 9% to $144 million due to a 30% increase in sequencing consumables sales. On a sequential basis, Consumables sales declined modestly due to lower microarray revenue. Sales outside the US grew more than 20% sequentially. Commercial customers accounted for about 26% of sales. Adjusted operating profit improved 6.9% to $65.8 million. Adjusted gross profit margin jumped 500 basis points to 69.5% of sales due to a shift in product mix and higher prices following GA trade-ins a year ago.

Illumina’s 2012 revenues grew 16.9% to $1,055.5 million. Backlog was $251 million. Product and Service revenues increased 17.2% and 13.3% to account for 94% and 6% of sales, respectively. Instrument sales grew 15% to represent 35% of sales. Consumables revenue grew 18% to account for 56% of sales. Adjusted operating profit climbed 24.3% to $266.8 million. Adjusted gross profit margin advanced 80 basis points to 68.3% of sales. Sales are projected to grow 8% in 2012 to $1,100–$1,175 million. First-quarter sales are expected to slide 9% to $250–$260 million.

Fourth-quarter sales for Life Technologies grew 3.9%, 3% on a currency-neutral basis, to $1,010.4 million (see page 12). Excluding currency, sales to Asia climbed 10%, European and Japanese sales each grew 4%, and sales to the Americas were flat. Adjusted operating profit grew 22.5% to $300.6 million due to reduced expenditures. Adjusted gross profit margin improved 20 basis points to 64.8% of sales due to pricing and productivity, which was partially offset by product mix.

In the quarter, Molecular Biology Systems sales slipped 2% excluding currency due to reduced academic and government spending. Lower real-time PCR royalty payments offset segment sales growth by 1% for both the quarter and year. Genetic Systems sales grew 11% before currency, driven by 50% sequential growth for Personal Genome Machines (PGM). Electrophoresis product sales grew in the low single digits. Cell Systems sales grew 1% excluding currency.

Full-year sales for Life Technologies grew 4.1%, 2% organically, to $3,588.1 million. Acquisitions and currency elevated revenue growth by 1.4% and 1.2%, respectively. Excluding currency, Molecular Biology Systems sales fell 2%. Genetic Systems and Cell Systems revenues grew 7% and 6%, respectively. The company shipped more than 700 PGMs systems and recorded more than $1 billion in online sales. Currency-neutral sales to Asia, Europe and the Americas rose 9%, 3% and 2%, respectively. Japanese sales fell 3%. Adjusted operating profit improved 5.6% to $1,089.4 million due to reduced expenses. Adjusted gross profit margin contracted 150 basis points to 65.3% due to product mix. Organic 2012 sales are anticipated to grow 2%–4%. Reduced US stimulus funding, lower real-time PCR royalty revenue and declining 5500 SOLiD sales are expected to depress sales growth by 1.1%, 0.8% and 1.6%, respectively. First-quarter sales are expected to grow in the 2% range to $915–$925 million.

Based on continuing operations, PerkinElmer’s fourth-quarter revenues grew 14.9%, 6% organically, to $540.2 million. Acquisitions contributed 8% to revenue growth, and currency was neutral. All sales figures below are reported on an organic basis. Sales to Asia and Europe each grew in the double digits. Eastern Europe was strong as a result of a Russian order for newborn and prenatal screening products. Emerging territories sales grew more than 20% to account for 27% of sales. US sales were flat. Adjusted operating income jumped 36.3% to $102.6 million due to the acquisition of Caliper Life Sciences (see IBO 9/15/11), product mix and operating efficiencies. Adjusted gross profit margin climbed 300 basis points to 49.9% of sales.

Acquisitions and currency elevated Human Health sales growth by 14% and 1%, respectively. Caliper sales grew in the mid-teens to contribute $31 million to revenues. Diagnostics revenue grew in the low-double digits organically. Organic Research revenue declined modestly due to weak radiochemical sales but was partially offset by higher in vitro imaging systems sales and demand for radiometric detection equipment in Japan. Human Health adjusted operating profit jumped 42.7% to $59.4 million. Adjusted operating profit margin improved 350 basis points to 22.8% of sales. Within Environmental Health, organic sales for the Lab Service business grew in the low single digits. Industrial and Environmental & Safety revenues each grew in double digits organically. Adjusted operating profit for Environmental Health advanced 39.8% to $55.4 million and improved 320 basis points as a percentage of sales to 18.8%.

PerkinElmer’s full-year revenues from continuing operations grew 12.7%, 6% organically, to $1,921.3 million. Acquisitions and currency expanded sales growth by 4% and 3%, respectively. Adjusted operating income rose 26.9% to $301.5 million. Adjusted gross margin improved 110 basis points to 48.3% of sales. As a percentage of total revenues, Diagnostics, Research, Lab Services, Environmental & Safety, and Industrial made up 26%, 22%, 24%, 19% and 9% of sales. Diagnostic sales improved 3% organically, with emerging markets accounting for 20% of sales. Within the Research business, radiochemical sales declined in the high single digits. Adjusted Human Health operating income climbed 18.6% to $182.3 million. Environmental Health adjusted operating profit jumped 33.4% to $158.9 million. In 2012, total revenues are expected to grow 10%–12%, 4%–6% organically, to $2.1 billion, with similar growth for both segments. Caliper is likely to contribute $180 million to sales. The informatics business is projected to grow in the mid-teens. Medical imaging and service sales are expected to each grow in the mid-single digits. Adjusted first-quarter sales are estimated to rise 4% organically to $500–$510 million. For both the first quarter and full year, currency is projected to lower sales by 2%.

Fourth-quarter revenue for Thermo Fisher Scientific’s Analytical Technologies (AT) grew 22.6%, 8% organically, to $1,079.54 million to account for 34% of sales. Acquisitions contributed 14% to growth, and currency was neutral. Demand from industrial and applied markets, as well as for bioprocess production products, was particularly strong. MS and LC sales also performed well. European sales improved as a result of increased spending from industrial and pharmaceutical customers. AT adjusted operating income jumped 38.4% to $228.1 million, and adjusted operating income margin improved 240 basis points to 21.1% of sales.

Full-year AT revenue rose 18.8%, 6% organically, to $3,845.4 million to make up 33% of sales. Acquisitions and currency contributed 11% and 2% to sales growth, respectively. Including Dionex, pro forma AT sales grew 9%, with 2% and 1% growth from currency and acquisitions, respectively. Adjusted operating income expanded 30.9% to $720.0 million, and operating margins climbed 170 basis points to 18.7% of sales. Including Dionex and Phadia, 2012 pro forma organic company sales are expected to grow in the 3% range to $12.15–$12.35 billion. Currency is expected to reduce sales growth by 3%, while acquisitions will add 0.5%.

Fourth-quarter revenues for Waters climbed 7.8% organically to $521.4 million. Product and Service sales grew 7.3% and 9.2% to account for 73% and 27% of sales, respectively. Instrument sales increased 8.0%. Pharmaceutical sales grew more than 8%, led by CROs and biopharmaceuticals. Sales to large drug firms were flat. Chemical analysis sales were led by food and environmental markets. Government and university sales were stable, with increased demand in the US but weaker sales in Europe and Japan. Excluding currency, US and European sales grew 8% and 14%, respectively. Japanese sales were flat. Sales to Asia (excluding Japan) fell 1% on a currency-neutral basis due to delayed orders in India following the rupee’s devaluation and a large Chinese order last year. Adjusted operating income rose 12.3% to $171.2 million. Gross margin was unchanged at 60.8% of sales.

Waters’s 2011 revenues grew 12.6%, 9.6% excluding currency, to $1,851.2 million. Product and Service sales grew 13.3% and 11.0% to account for 71% and 29% of sales, respectively. Instrument sales rose 14.1%. Pharmaceutical sales climbed 13%, industrial and environment sales increased 15%, and government and academic sales grew 5%. Currency-neutral sales to Europe, Asia (including Japan) and the US increased 11.2%, 8.7% and 6.2% to account for 31%, 33% and 29% of sales, respectively. Other region sales rose 24.7%. Adjusted operating income expanded 16.9% to $546.3 million, including 5.6% growth from currency. Gross profit margin added 30 basis points to 60.8% of sales. In 2012, sales are estimated to grow 8%–10%; 6%–8% excluding currency. First-quarter sales are expected to grow 5% organically.