The devaluation of China’s yuan sparked an extensive sell-off in the global equity markets in August. The S&P 500 and NASDAQ contracted 9% or more on three consecutive trading days beginning August 20. Despite strong surges on August 26, the Dow, S&P 500 and NASDAQ fell 6.6%, 6.3% and 6.9% for the month, respectively. The increased market volatility and slide in consumer confidence readings may influence the US Federal Reserve to leave interest rates unchanged in its September policy meeting. Year to date, the Dow and S&P 500 are down 7.3% and 4.2%, respectively, while the NASDAQ is up 0.9%.

Laboratory Instruments and Products

The Index slumped 9.5% to 224.39 this month but is up 0.9% for the year. In August, all companies traded in negative territory except for Kewaunee Scientific and Luminex, which advanced 2.3% and 5.7%, respectively.

Luminex continued its streak of beating analysts’ expectations, as EPS benefited from revenue mix. On August 3, the company raised the lower end of its 2015 revenue projection by $2 million to $232–$236 million. Wedbush upgraded the company on August 4 from “Neutral” to “Outperform.” Kewaunee managed to trade higher despite reporting weak EPS results on August 26. The following day, the company announced an 8% quarterly cash dividend increase to $0.13 per share.

Among the month’s decliners, values for 10 companies fell in double digits, led by Fluidigm, which dropped 39.1%. While the company posted a smaller-than-expected second quarter adjusted EPS loss on August 6, sales fell short of expectations. Furthermore, the company lowered its 2015 revenue outlook from $133–$143 to $110–$115 million due to weak demand from production genomics customers.

Bruker and Pacific Biosciences also recorded sharp declines for the month, sliding 12.7% and 12.5%, respectively. Despite lower year-over-year second quarter adjusted EPS growth, Bruker exceeded analysts’ consensus on August 5. The company maintained its adjusted flat EPS growth outlook for 2015. Pacific Biosciences reported a wider-than-expected second quarter adjusted EPS loss on August 5.

Agilent Technologies, which fell 11.3% for the month, beat analysts’ adjusted EPS expectations for the fiscal third quarter ending July 31. However, given a stronger currency headwind and soft industrial demand, the company slightly lowered its 2015 revenue outlook and tightened its adjusted EPS range by $0.01 to $1.68–$1.72. Fiscal fourth quarter adjusted EPS are expected to be $0.45–$0.49.

Similar to Agilent, both Bio-Rad Laboratories and Becton, Dickinson contracted for the month, falling 7.6% and 7.3%, respectively, in spite of stronger-than-expected EPS. On August 6, Becton raised its fiscal 2015 EPS range from $7.00–$7.10 to $7.08–$7.12. On the same day, Bio-Rad reaffirmed its 2015 currency-neutral revenue growth outlook of 3% but cautioned that currency could further impact its financial results.

Other companies reporting this month included NanoString Technologies, MTS Systems and VWR. On August 3, MTS missed fiscal third quarter EPS consensus due to lower-than-projected Test sales. As a result, the company projected fiscal 2015 EPS at the lower end of its previous range of $3.00–$3.25. Conversely, on August 4, NanoString handedly beat analysts’ second quarter adjusted EPS consensus and raised its 2015 revenue outlook by $2 million to $60–$63 million due to increased collaboration revenue. On August 12, VWR beat second quarter sales and adjusted EPS consensus and maintained its full-year adjusted EPS outlook of $1.42–$1.50. In a refinancing effort, the company announced on August 24 plans to redeem all of its $750 million outstanding 7.25% senior notes due 2017.

Diversified Laboratory

Pall was removed from the Index following its completed acquisition by Danaher on August 31 (see IBO 5/15/15). In August, the Index contracted 5.2% to 175.99, with all companies trading lower, except AMETEK, which advanced 1.5%. On August 4, AMETEK met second quarter adjusted EPS consensus and maintained its full-year adjusted EPS guidance of $2.58–$2.63. For the year, the Index is down 4.3%.

International

In August, Asia-Pacific equity markets tumbled, led by China’s Shanghai Composite and Hong Kong’s Hang Seng, which fell 12.5% and 12.0%, respectively. Japan’s Nikkei 225 contracted 8.2%.

For the month, prices for the Pacific Region companies in the IBO Stock Table were mostly lower. Precision System Science recorded the sharpest decline, falling 28.1%. On August 14, the company reported a fiscal full-year EPS loss of ¥11.79 ($0.10), compared to a gain of ¥33.53 ($0.33). However, the earnings loss was smaller then projected.

Despite strong earnings growth, both HORIBA and Shimadzu also declined for the month, sliding 8.8% and 3.4%, respectively. On August 6, HORIBA reported stronger-than-expected second quarter EPS, which grew 67% to ¥53.37 ($0.44) due to demand from semiconductor manufacturers and currency benefits. The company raised its 2015 EPS forecast by 4% to ¥284.79 ($2.37). On the same day, Shimadzu reported that fiscal first quarter net earnings jumped 164.4% and raised its fiscal 2015 net income target by 5% to ¥21.0 billion ($175.0 million) for growth of 13.8%.

Surprisingly, JEOL surged 40.8% for the month. On August 11, the company reported a fiscal first quarter EPS loss of ¥1.17 ($0.01) compared to a loss of ¥29.87 ($0.29), as sales climbed 13.9% (see page 12). The company maintained its fiscal year EPS forecast of ¥41.38 ($0.34).

GL Sciences also stayed in positive territory for the month, improving 0.3%. On August 3, the company reported that fiscal first quarter EPS ending June 30 more than doubled to ¥11.50 ($0.09), as sales grew 3.9% and cost of goods declined as a percentage of sales.

All European equity markets also declined in August, along with a majority of the European companies in the IBO Stock Table. However, Sartorius and Tecan stayed afloat, rising 7.7% and 5.2%, respectively. On August 12, Tecan reported that six month EPS climbed 35% to CHF 2.23 ($2.38) due to strong sales volume and favorable currency hedging. The company maintained its 2015 double-digit sales growth outlook in local currencies including acquisitions.

Several other companies reported earnings this month. Merck KGaA reported on August 6 that second quarter EPS grew 13% to €0.79 ($0.88). The company maintained its adjusted EPS outlook of €4.60–€4.80 ($5.11–$5.33) for the year. On August 27, the company announced a total placement of €2.1 billion ($2.3 billion) in bonds through three separate tranches to support the financing of its Sigma-Aldrich purchase (see IBO 9/30/14). Both BMO Capital Markets and BNP Paribas upgraded the company to “Outperform” from “Market Perform” and “Neutral” on August 13 and August 18, respectively.

On August 13, Biotage reported that second quarter EPS was unchanged at SEK 0.24 ($0.03), as earnings were hindered by increased investments, currency and higher tax expenses. On August 25, Exiqon reported second quarter revenue growth of 24% (see page 12) and breakeven EPS, compared to a loss of DKK 0.03 ($0.01). The company raised the lower range of its 2015 revenue outlook by 3% to DKK 155–160 million ($23–$24 million), and projected EBITDA at the top end of its previous range of around DKK 10 million ($1.5 million).