In the second quarter, revenues for IBO’s Laboratory Sales Index grew 1.2%, 3.2% excluding currency, to $5,729 million. Operating profit improved 1.4% to $1,153 million. Based on continuing operations, operating margin slipped 30 basis points to 17.6% of sales. For the two companies (Oxford Instruments, Tecan) that did not report earnings before this issue’s publication, modest growth rates are included.

Affymetrix posted positive quarterly revenue growth for the first time in two years, as second-quarter sales improved 2.7%, 3% organically, to $66.4 million (see page 12). The acquisition of eBioscience (see IBO 5/15/12), which will operate as a fourth business unit, contributed 2.2% to revenue growth, while currency lowered sales growth by 2.0%. Overall, consumables sales grew 0.7% to account for 82% of sales, and Instrument revenue was flat to make up 6%. Service and Other sales climbed 21.2% to represent 12% due to strong demand for Axiom and OncoScan services. Demand from industrial customers grew 8%, but was mostly offset by an 8% decline in academic sales. North American sales grew 1%. Sales to Europe and Asia fell 1% and 2%, respectively.

Within Affymetrix’s Expression business unit, sales fell 8%. Sales volume for microarrays grew in double digits, but was offset by a shift toward lower-priced plate array and cartridge products. However, Panomics product sales grew more than 12%, including double-digit growth for combined sales of the QuantiGene and Procarta product lines used for RNA and protein expression. Despite lower sales of SNP 6.0 arrays, Genetic Analysis and Clinical Applications sales grew 17%, driven by strong demand for cytogenetic products. Axiom sales grew in double digits sequentially. EBioscience sales grew 7% in local currency, including 10% sales growth for flow cytometry reagents. Life Science Reagents sales, which continue to be affected by the transition to a direct-sales force, declined 8%. For the second half of the year, this business is expected to grow in the low to mid-single digits. Adjusted operating loss narrowed by 64.2% to $0.6 million due to lower R&D costs. Gross profit margin slipped 180 basis points to 58.3% of sales because of product mix. The company projected modest growth for the second half of the year, with Expression, Genetic Analysis and Clinical Applications, eBioscience and Life Science Reagents sales expected to make up 36%, 24%, 22% and 10% of sales, respectively. Other revenues, including licensing, royalties and services, should account for 8%.

Analytik Jena’s fiscal third-quarter sales climbed 16.9% to €22.4 million ($28.7 million = €0.78 = $1) (see page 12). Operating profit jumped 39.3% to €1.1 million ($1.5 million) due to higher revenues and lower administrative expenses as a percentage of sales. Gross profit margin slid 80 basis points to 50.0% of sales. Sales in Germany, Asia and America grew 13.5%, 31.9% and 40.0% to account for 25%, 44% and 7% of sales, respectively. Sales to other European countries declined 11.2% to make up 19%. Sales to Rest of World climbed 41.5%. Analytical Solutions (AI) sales grew 17.6% to account for 65% of sales, led by demand in Asia. AI operating profit rose 45.0% to €1.7 million ($2.2 million), and gross profit margin expanded 190 basis points to 55.3% of segment sales. Life Science (LS) revenue grew 9.8% to account for 28% of sales. LS operating loss widened by 32.7% to €0.6 million ($0.8 million), and gross profit margin dropped 400 basis points to 42.4% of segment sales. For the fiscal fourth quarter, AI sales are projected to grow in double digits organically.

Harvard Bioscience’s quarterly revenues grew 5.0%, 2.2% organically, to $28.5 million (see page 12). Acquisitions added 4.9% to revenue growth, while currency lowered sales by 2.1%. Sales for Biochrom, Denville and Hoefer each grew organically. Adjusted operating loss widened 35.9% to $2.0 million as a result of increased R&D expenses. Gross profit margin increased 70 basis points to 47.8% of sales due to product mix. Operating profit for the Life Science Research Tools segment was unchanged at $4.1 million. Operating loss for the Regenerative Medicine Device segment widened 176.2% to $1.6 million. Third-quarter revenues are projected to grow 3%–6% to $27–$28 million.

Second-quarter sales for HORIBA Process and Environmental Instruments & Systems (P&E) declined 10.3%, 9% excluding currency, to ¥3,002 million ($37.5 million = ¥80.08= $1) to account for 11% of company revenues (see page 12). Sales were negatively impacted by lower demand from Asia and Europe, as well as slowing sales of stack gas analyzers and radiation measurement equipment in Japan. Japanese, Asian and European sales fell 7.4%, 20.8% and 25.1% to account for 68%, 14% and 10% of P&E revenue, respectively. Sales to the Americas grew 13.7%. Operating income dropped 68.7% to ¥128 million ($1.6 million). The full-year P&E revenue and operating income forecasts were lowered by 4% and 11% to ¥13,500 million ($169 million) and ¥1,700 million ($21 million), respectively.

Sales for HORIBA Scientific Instruments & Systems (SI) fell 4.0%, but were only marginally lower on a currency-neutral basis at ¥4,635 million ($57.9 million) to account for 17% of company sales. Despite stable demand for pH meters and optical analyzers, Japanese sales declined 6.4% to make up 30% of SI sales. Sales to the Americas fell 11.4% to account for 20% due to lower government spending. Asian and European sales improved 0.7% and 1.5%, respectively, to represent 25% of SI sales each. Segment operating profit was ¥2 million ($25,975), compared with ¥37 million ($0.5 million = ¥81.57= $1) a year ago. SI full-year sales and operating income forecasts were lowered by 5% and 19% to ¥20,500 million ($256 million) and ¥1,300 million ($16 million), respectively.

Luminex’s second-quarter revenues improved 1.3% but declined roughly 11% excluding the acquisition of EraGen Biosciences (see IBO 6/21/11) to $48.3 million. Assay revenue climbed 89.1% to account for 36% of sales, primarily due to the acquisition. Royalty revenue grew 4.1% to make up 16%. Consumable sales fell 41.3% to represent 22% due to fluctuations in bulk orders from one customer. System sales contracted 8.2% to make up 17%, as a result of product mix and lower shipments of automated punching systems, which fell 59.1% to 18 units. The number of analyzers shipped during the quarter increased 12.1% to 278, including a 169.4% increase in MAGPIX system shipments to 167 units. Service and Other revenue rose 12.4% to account for 8% of sales. Adjusted operating profit slumped 19.5% to $7.6 million due to higher operating expenses. Gross profit margin improved 30 basis points to 71.3% of sales. Technology and Strategic Partnerships revenue fell 18.4% to $29.6 million, and operating profit dropped 62.5 % to $4.3 million. Assays and Related Products sales jumped 63.7% to $18.7 million, and operating profit was $2.1 million compared with loss of $2.8 million.

Fiscal first-quarter sales for Shimadzu’s Analytical and Measuring Instrument (AMI) division grew 2.5% to ¥30,181 million ($376.9 million = ¥80.08 = $1) to represent 55% of total revenues (see page 12). Japanese sales were negatively impacted by lower LC sales to pharmaceutical markets and slower demand for testing machines and nondestructive testing systems. This decline was partially offset by strong LC sales to chemical markets, as well as higher demand for MS and GC products from analytical centers and academic customers in Japan. Sales to North America and China were strong due to higher MS sales, while European markets were significantly challenged. Segment operating profit declined nearly fourfold to ¥431 million ($5.4 million).

First-half sales for Spectris Materials Analysis (MA) grew 6.4%, 7% excluding currency, to £166.1 million ($261.6 million = £0.64 = $1) to account for 28% of company sales. Pharmaceutical sales were strong, led by shipments of the Mastersizer 3000 and higher demand for pharmaceutical solutions in China. Overall, sales to metals, minerals and mining sectors improved. However, strong demand from the mining and building materials sectors in Latin America were partially offset by lower sales to the cement and steel markets in China. Life Science sales increased as a result of broader regulation requirements and a complete product offering for facility management systems. Academic and research-related sales were also higher, primarily due to strong demand in China and Latin America. Adjusted MA operating profit grew 3.3% to £25.1 million ($39.2 million), but operating margin declined 50 basis points to 15.1% of sales.

 Column Chart: Quarterly Organic Sales Change January 2009 – June 2012

          Q1     Q2      Q3     Q4

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

 2010   8.0%   9.1%   10.5%   7.1%

 2011   7.1%   8.3%    5.7%   6.9%

 2012   4.3%   3.2%

 Column Chart: Quarterly Operating Profit Margins January 2009 – June 2012

          Q1     Q2     Q3     Q4

 2009  17.4%  17.9%  18.3%  19.9%

 2010  19.8%  18.9%  19.8%  19.9%

 2011  19.2%  18.9%  19.0%  20.6%

 2012  18.5%  17.6%

 Laboratory Instrument Index                                                 % Change    

                                  2009      2010      2011     2012  2009–10  2010–11  2011–12

 Total Annual Revenues ($M)    $19,756   $21,505   $23,429    -----    8.9%     8.9%    -----

 Annual Oper. Profits ($M)      $3,676    $4,308    $4,883    -----   17.2%    13.4%    -----

 2nd Quarter Revenues ($M)      $4,634    $5,045    $5,662   $5,729    8.9%    12.2%     1.2%

 2nd Quarter Oper. Profits ($M)   $845      $977    $1,137   $1,153   15.7%    16.4%     1.4%