Agilent Posts Solid Quarter

Agilent Technologies fiscal first quarter revenues ending January 31 improved 0.2%, 6.4% organically, to $1.03 billion (see page 12). Sales were slightly ahead of company expectations, driven by strength in the pharmaceutical, and clinical and diagnostics markets. Furthermore, academic and government sales returned to growth due to increased government spending in China for environmental and food products.

All sales figures below are based on organic growth. Total sales to analytical laboratory markets grew 6% to account for 86% of revenues. Growth was led by broad-based biopharmaceutical demand, for which sales climbed 19% due to new products, technology upgrades and aftermarket sales. Environmental sales advanced 9% driven by demand in China. Academic and government sales grew 4% as a result of increased budget spending in the US. In spite of strong demand in China, food sales slipped 1%. The largest drag on sales was from oil and gas exploration and production customers, which led to a 2% decline in chemical and energy sales. Accounting for the remaining 14% of revenues, diagnostic and clinical sales grew 7%, led by double-digit sales growth for NGS target enrichment products.

Overall, Agilent sales in the Americas and Europe grew 6.1% and 1.7% to account for 34% and 32% of revenues, respectively. Asia Pacific sales increased 12.2%, including 5.7% growth in Japan and 13.5% growth in Other Asia Pacific, to make up 34% of revenues. Adjusted gross margin expanded 180 basis points to 54.9% due to a stronger mix of higher-margin LC products. Adjusted operating margin advanced 200 basis points to 20.2%.

Given the strengthening of the US dollar, Agilent lowered its fiscal 2016 revenue outlook by $50 million to $4.10–$4.12 billion for growth of 2%. However, the company’s core growth range of 4.0%–4.5% remained unchanged. Fiscal second quarter sales are projected to grow 1% at the midpoint, 4% organically, to $965–$985 million.

Pharma Boosts BD Biosciences Growth

Fiscal first quarter revenue for Becton, Dickinson’s BD Biosciences unit contracted 4.4% to $276 million to account for 9% of company sales (see page 12). Excluding currency, segment sales grew 1.2%, led by demand for high-end instruments and research reagents. Sales for the advanced bioprocessing business were particularly strong. However, this growth was partially offset by tender delays from clinical customers in emerging markets and a strong year-over-year comparison. US sales grew 6.1% to make up 36% of Biosciences revenue. International revenue declined 9.4%, 1.1% excluding currency, to account for 64% of segment sales.

Bruker Tops Expectations

For the fourth quarter 2015, Bruker Scientific Instruments (BSI) sales declined 7.8% to $438.9 million to account for 92% of revenues. However, excluding currency and divestments, net of acquisitions, organic sales were flat. All sales figures below are based on organic growth. Bruker CALID sales grew in the mid-high single digits to account for roughly 37% of BSI revenues. The Detection business performed particularly well due to large orders and new explosive trace detection products. The Daltonics business was stable with growth across most product lines, including strong sales of the MALDI Biotyper. Despite weak industrial markets, sales for the Optics business expanded.

Bruker BioSpin sales benefited from a continued rebound in the NMR business, for which orders grew in double digits. Favorable pricing also contributed to revenue growth. Conversely, sales and orders for the Preclinical Imaging business declined.

Bruker Nano sales were mixed, as higher demand from academic markets and China was offset by weak demand from industrial and semiconductor customers. Given the challenges in these markets, sales for the Nano Surfaces Division declined. In contrast, the AXS Division recorded mid-single digit sales growth, and sales for the Nano Analytics Division grew in the low teens.

BSI adjusted operating profit improved 19.3% to $78.0 million due to completed restructuring activity, divestments, increased pricing, product mix and currency.

For 2015, BSI sales fell 10.5% to $1.50 billion but grew 1.3% organically. Bruker CALID sales grew 7% to account for 33% of segment sales. This growth was driven by strong demand in the Detection Division, especially from various European airports. In addition, sales for the MALDI Biotyper grew roughly 10% to around $100 million, including high single digit growth for systems, and above 10% growth for consumables and services.

Bruker BioSpin sales declined 3% due to weakness in the Preclinical Imaging Division. Given their slow start in 2015, NMR sales were flat for the year, while orders grew in the low teens, led by higher volume and pricing. Bruker Nano sales grew 1% to make up 31% of segment revenue. AXS Division sales grew in the high single digits, including strong sales of XRD products. Nano Analytics Division sales grew in the low teens, led by strong demand for micro-XRF products. Nano Surfaces Division sales declined due to challenges in the industrial markets, especially in certain Asia Pacific regions.

Geographically, total 2015 Bruker sales in Europe grew in the high single digits. Sales in the Americas advanced in the low single digits. Asia Pacific sales declined in the high single digits due to weakness in Japan, Korea, Taiwan and Southeast Asia. However, China maintained positive growth due to academic and research spending.

For 2016, Bruker projected both reported and organic revenues to grow roughly 3%. A strong backlog and higher pricing of NMR products as well as slightly higher growth in China are projected to drive BSI sales. Daltonics’ sales growth is expected to fall back in line with the company average. Industrial markets will continue to drag on revenue growth, along with weakness in the semiconductor and data storage businesses. The company also expects little improvement in Japan.

Modest Organic Growth for Danaher

Fourth quarter 2015 sales for Danaher’s Life Sciences & Diagnostics segment advanced 2.0% organically to account for 46% of company revenues. As a result of fewer selling days and slower demand in developed markets, organic sales for the diagnostics business grew in the low single digits. Sales for the life sciences business grew similarly at a low single-digit pace. The company also did not experience any budget flushes as in previous fourth quarters. SCIEX sales grew in the mid-single digits organically, led by strength from clinical and applied customers. Leica Microsystems organic sales were roughly flat, as higher demand in China and Japan was offset by weakness in Europe, the Middle East and Latin America. Quarterly segment operating profit margin fell 270 basis points to 13.9%. For the full-year 2015, Life Sciences & Diagnostics sales grew roughly 4.0% organically to $8.21 billion to make up 40% of revenues.

Quarterly revenue for the Environmental segment grew 4.0% organically to make up 17% of revenues. Organic sales for the segment’s water quality platforms grew in the low single digits. Trojan sales were strong due to increased activity from the North American municipal market and ChemTreat sales were slightly higher. Core Hach sales were flat, as fewer selling days and weakness from industrial customers in developed regions curbed growth. However, the BioTector business, which offers online TOC analyzers, recorded double-digit revenue growth. Segment operating margin expanded 265 basis points to 21.8%. For 2015, Environmental sales grew roughly 5.5% organically to $3.64 billion to account for 18% of revenues.

HORIBA Posts Mixed Results

Fourth quarter 2015 HORIBA Process and Environmental Instruments & Systems (P&E) revenue grew 5.0% to ¥4,899 million ($40.3 million = ¥121.42= $1) to make up 9% of company sales. Currency had a marginal impact on segment sales. Japanese sales rebounded, climbing 8.6%. Sales to other Asian markets were particularly robust with growth in the strong double digits. However, sales in Europe declined in the mid- to high single digits, while sales in the Americas fell double digits. Segment operating income expanded 12.4% to ¥627 million ($5.2 million). Quarterly sales for HORIBA’s Scientific Instruments & Systems (SI) segment declined 1.1% to ¥8,171 million ($76.8 million) to account for 15% of revenues. Currency was roughly neutral to SI sales. Segment sales grew double digits in Japan and Asia, but declined double digits in Europe and the Americas. SI operating profit slumped 31.9% to ¥836 million ($6.9 million).

Full-year 2015 HORIBA P&E sales advanced 1.8% to ¥16,754 million ($138.4 million = ¥121.04= $1) to account for 10% of total sales. Sales were led by demand for stack gas analyzers in Japan and China. However, excluding currency, P&E revenue declined roughly 2%. Japanese sales declined 0.3% to make up 50% of P&E revenue. Excluding currency, sales in other Asian markets and the Americas contracted to represent 21% and 15% of P&E revenue, respectively. European sales were roughly flat to account for 14%. P&E operating profit declined 11.6% to ¥1,773 million ($14.6 million).

For 2015, HORIBA SI sales grew 5.6% to ¥27,059 million ($223.6 million) to account for 16% of sales. Excluding currency and acquisitions, SI sales advanced roughly 1%, led by robust instrumentation demand from academic customers in China. Segment sales in Japan and Asia each grew in the low single digits organically to account for 27% and 23% of revenue. Organic sales growth in the Americas was marginal, while European sales declined to make up 26% and 24% of sales, respectively. SI operating profit grew 8.4% to ¥1,307 million ($10.8 million). For 2016, SI and P&E sales are expected to grow 5% and 8% to ¥28,000 million ($245 million) and ¥18,000 million ($158 million), respectively.