In the second quarter of 2011, revenues for IBO’s Laboratory Sales Index grew 12.2% to $5,659.71 million, including 3.9% growth from currency. Operating profit rose 15.0% to $1,131.55 million, but operating margin was unchanged at 18.9% of sales. Dionex was removed from the Index following its purchase by Thermo Fisher Scientific on May 17 (see IBO 12/15/10). For the three firms (Oxford Instruments, Spectris and Tecan) that did not report earnings before publication, modest estimated growth rates are included.

Affymetrix’s second-quarter revenues slumped 9.8% to $64.7 million mainly due to increased competition and weak microarray sales to academic and pharmaceutical customers in North America. Sales to Asia and Europe also declined. Total Product revenue fell 10.7% to account for 90% of sales, including a decline in Consumables and Instrument revenues of 10.4% and 15.1% to $54.3 million and $3.8 million, respectively. DNA and RNA consumables sales contracted 12.2% and 12.7% to $19.4 million and $29.6 million, respectively. The company reported modest growth for cytogenetic products and Panomics assay kits, as well as sturdy sales of USB products. Combined sales of Panomics and USB products accounted for 15% of sales. Service revenue climbed 10.9% to make up 8% of sales, and Royalty and Other revenue dropped 31.5% to account for 2%. Adjusted operating loss narrowed by 45.0% to $3.1 million due to a 9% cut in operating expenses, including a 14% decline in R&D. Gross profit margins improved 350 basis points to 60.1% of sales. Hoping to reverse several consecutive quarters of declining revenues, the firm is focusing on improving marketing efforts and expanding its applications in areas of next-generation sequencing, cancer research, cytogenetics and agbio.

Analytik Jena’s fiscal third-quarter sales grew 2.1% to €19.2 million ($27.8 million = €0.69 = $1) (see page 12). Operating profit climbed 274.2% to €0.48 million ($1.2 million) due primarily to a 20% decline in R&D. Gross profit margin expanded 118 basis points to 50.8% of sales. Sales in Germany and Asia rose 2.7% and 11.4% to account for 26% and 39% of revenues, respectively. Sales to America and European countries other than Germany fell 28.6% and 0.1% to make up 6% and 25%, respectively. Sales to other regions slipped 2.7% to represent 3%. Analytical Instrumentation (AI) sales grew 8.2% to make up 65% of sales, driven by demand in Asia. AI operating profit grew 5.1% to €3.7 million ($5.4 million), but gross profit margin fell 240 basis points to 52.2% of segment sales. Life Science (LS) sales fell 9.6% to account for 29% of sales due to slower European and US demand. LS operating loss narrowed by 23.5% to €0.8 million ($1.1 million), and gross profit margin climbed 800 basis points to 40.2% of segment sales.

Harvard Bioscience’s quarterly revenues grew 4.8% to $27.1 million (see page 12), including 2.8% growth from the Coulbourn Instruments acquisition (see IBO 8/31/10) and 3.6% growth from currency. Organic revenues fell 1.6%, including a 3.5% decline attributed to the Nanovue spectrophotometer to GE Healthcare. The decline in the Biochrom business was expected due to inventory buildups from GE. Full-year Nanovue revenue is expected to fall by $5 million. Adjusted operating income grew 7.8% to $3.2 million, and gross profit margin grew 50 basis points to 47.1% of sales due to operational efficiency and product mix. The firm projected third-quarter revenues to grow 6%–10% to $28–$29 million and full-year sales to increase 4%–6% to $113–$115 million. Both forecasts include the acquisition of CMA (see IBO 7/15/11).

For the second quarter, HORIBA’s Process and Environmental Instruments & Systems (P&E) revenue grew 21.6%, 23% excluding currency, to ¥3,346 million ($41.0 million = ¥81.57= $1) (see page 12). Segment sales were boosted by increased demand for air pollution and stack gas analyzers, as well as radiation measurement equipment. Japanese and Asian sales climbed 38.5% and 24.8% to account for 66% and 15% of P&E revenue, respectively. Sales to Europe grew 5.1% to make up 12% of segment revenue, and sales to the Americas fell 39.9% to represent 6%. P&E operating income jumped 243.7% to ¥409 million ($5.0 million). Sales for the Scientific Instruments & Systems (SI) segment grew 6.5%, 9% excluding currency, to ¥4,826 million ($59.2 million) (see page 12). Segment operating profit was ¥37 million ($0.5 million), compared with a loss of ¥63 million ($0.8 million = ¥92.18= $1) a year ago. Sales to Japan, Asia and the Americas grew 29.3%, 13.8% and 7.6% to make up 31%, 23% and 22% of SI sales, respectively. European sales contracted 17.8% to represent 24%. The firm raised its full-year P&E segment revenue and operating income forecast by 15% and 700% to ¥13,800 million ($173 million) and ¥1,700 million ($21 million), respectively. Full-year sales forecast for SI was unchanged at ¥21,000 million ($263 million), but segment operating income was lowered by 27% to ¥800 million ($10 million).

Luminex’s second-quarter revenues jumped 43.3% to $47.6 million (see page 12). Consumables and Royalty revenues climbed 89.7% and 52.5% to account for 39% and 16% of sales, respectively. Consumables bulk orders reached a record of $16.1 million. Royalty payments for xMAP rose 34% to $97 million. System sales grew 15.7% to make up 19% of sales. The number of analyzers shipped during the quarter increased 13% to 248, including 62 FLEXMAP 3D systems. Assay revenue advanced 24.5% to represent 19% of sales, led by strong demand for Cystic Fibrosis and xTAG Respiratory Viral Panel products. Service contracts and Other revenue rose 2.5% to account for 7% of revenues. Technology and Strategic Partnerships revenues climbed 43.5% to $36.2 million, and operating profit soared 220.0 % to $11.6 million. Revenues for the Assays and Related Products increased 42.6% to $11.4 million, but operating loss doubled to $2.8 million. Operating profit grew 288.4% to $8.8 million. Gross profit margin improved 34 basis points to 71.0% of sales. The company raised its full-year revenue outlook by 10% to $180–$185 million for growth of 27%–31%, including 4% growth from the acquisition of EraGen (see IBO 6/30/11).

QIAGEN’s second-quarter revenues grew 7.4%, 1% excluding currency, to $282.2 million. All figures listed below are on a currency-neutral basis. Consumables sales rose 2% to make up 87% of sales, but instrument sales fell 7% to account for 13%. Instrument revenue was negatively impacted by accounting recognition for reagent-rental agreements and timing issues. Molecular diagnostic revenue grew 2% to account for 46% of sales. Academic and applied testing revenues each improved 1% to make up 26% and 7% of sales, respectively. Sales to the pharmaceutical industry were flat, representing 21%. Sales to the Americas and Asia grew 5% and 8% to account for 52% and 17% of sales, respectively. US sales benefited from higher HPV tests revenues, and Asian sales were elevated by increased demand for life sciences products in China. But sales growth for molecular diagnostics products in China was below expectations. Sales to Europe, Middle East and Africa fell 5% to make up 31% of sales. Adjusted operating profits improved 5.8% to $73.4 million, and gross profit margin advanced 98 basis points to 66.8% of sales. The company revised its full-year revenue growth outlook to reflect slower organic sales but additional revenue from the acquisitions of Cellestis (see IBO 4/15/11) and Ipsogen (see IBO 6/15/11). Total 2011 currency-neutral sales are projected to grow 3% to $1,120 million. Second-half sales are expected to grow 7% on a currency-neutral basis, including half of growth from acquisitions.

In the second quarter, SDIX revenues climbed 4.0% to $7.1 million. Life Science revenue grew 13.1% to account for 59% of sales and was driven by higher demand from biopharmaceutical and in vitro diagnostic customers. Kit revenues fell 4.3% to make up 41% of sales, including 20% and 43% declines in Water & Environmental and Ag-GMO product sales to $1.0 million and $0.3 million, respectively. Food Safety product sales jumped 26% to $1.6 million, resulting from higher sales of E. coli and salmonella tests. Adjusted operating loss more than tripled to $0.6 million due to increased sales, marketing and R&D investments for the Life Science and Food Safety businesses. Gross margins declined 118 basis points to 58.2% of sales due to product mix.

 Column Graph: Quarterly Organic Sales Change

 January 2008–June 2011

 Quarterly Sales % Growth    

 Year    Q1    Q2     Q3    Q4

 2008   5.6%  8.2%   4.3%  1.1%

 2009  -2.2% -5.7%  -4.5%  0.5%

 2010   8.0%  9.1%  10.5%  7.1%

 2011   6.8%  8.3%

 Column Graph: Operating Profit Margins

 January 2008–June 2011

 Year    Q1    Q2     Q3      Q4

 2008  17.6%  17.2%  18.1%  19.1%

 2009  17.4%  17.9%  18.3%  19.9%

 2010  19.8%  18.9%  19.8%  19.9%

 2011  19.2%  18.9%

 Laboratory Instrument Index, Total                                    % Change    

                                  2008     2009      2010     2011     08/09    09/10    10/11

 Total Annual Revenues ($M)    $20,660  $19,756   $21,504    -----     -4.4%     8.8%    -----

 Annual Oper. Profits ($M)      $3,719   $3,676    $4,315    -----     -1.2%    17.4%    -----

 Annual Oper. Profits (%)        18.0%    18.4%     19.6%    -----     -----    -----    -----

 2nd Quarter Revenues ($M)      $5,174   $4,634    $5,046   $5,660    -10.4%     8.9%    12.2%

 2nd Quarter Oper. Profits ($M)   $888     $845      $984   $1,132     -4.8%    16.5%    15.0%

 2nd Quarter Oper. Profits (%)   17.2%    17.9%     18.9%    18.9%     -----    -----    -----