Agilent Lifted by Chemical Markets

Fiscal first quarter sales for Agilent Technologies ending January 31 advanced 3.8%, 4.8% organically, to $1.07 billion. Organic growth exceeded company expectations due to stronger-than-projected demand in China, especially for food testing. In addition, sales from chemical customers grew for the first time in nearly two years. All sales figures below are based on organic growth.

Biopharmaceutical sales climbed 7%, led by strength in China and India. Food sales, which jumped 11%, were also driven by demand in China, especially for food safety testing as well as growing demand for food authenticity. Diagnostics and clinical sales grew 8%, driven by companion diagnostics and demand from toxicology labs. Chemical and energy sales improved 3%, as increased demand from chemical customers offset muted demand from the energy markets. Conversely, environmental and forensics revenue slipped 1%, as strong environmental demand in China was offset by lower US forensic sales. Academia and government sales similarly declined 1% with softness across most regions.

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Life Sciences and Applied Markets Group sales grew 4% organically, led by strength in the biopharmaceutical, food and chemicals markets. Demand for new products remained strong, including the Infinity II LC and 8900 ICP-MS systems. The company also highlighted positive instrument sales growth to chemical customers.

CrossLab Group sales climbed 7%, including similar growth for both consumables and services.

Diagnostics and Genomics Group sales expanded 4%.

Accounting for 36% of revenues, sales in Asia Pacific grew 10%, including low single-digit growth in China and flat sales growth in Japan. Sales in the Americas improved 4% to make up 34%. European sales were flat to account for 30%. Adjusted operating margin expanded 96 basis points to 20.9% due to new products and efficiency improvements.

The company slightly lowered its fiscal 2017 revenue guidance to $4.33–$4.35 billion due to increased currency headwinds. However, its organic growth outlook was raised by 25 basis points to 4.25%–4.75% as a result of the stronger-than-expected fiscal first quarter. Fiscal second quarter sales are projected to grow 3.5% organically to $1.04–$1.06 billion.

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Bruker Expands Margins  

Q4 2016

Fourth quarter 2016 sales for Bruker’s Scientific Instruments (BSI) slipped 0.9%, 0.3% organically, to $470.3 million. The organic sales decline was in line with company expectations due to soft industrial demand and weak European academic orders earlier in the year. However, following three consecutive down quarters, European academic orders increased during the fourth quarter.

Bruker BioSpin sales maintained steady organic growth, while Bruker CALID and Bruker Nano sales declined due the weak orders.

Geographically, total company sales in Europe and the US declined roughly 12% and 2% organically, respectively. Asia Pacific sales climbed roughly 13% organically, including more than 20% growth in China and roughly a 5% decline in Japan. Bruker adjusted operating margin advanced 210 basis points to 19.6% due to completed restructuring efforts and improved pricing within the BSI segment.

2016

Full-year 2016 BSI sales declined 0.4%, 1.7% organically, to $1.94 billion to account for 93% of company revenues. Acquisitions contributed 1.9% to sales growth, while currency headwinds amounted to 0.6%. Similar industrial and academic market weakness, as well as challenges within the MS business, hampered sales growth for the full year. However, the company reported strong demand in China and improved NMR revenue, driven by pricing and volume.

Bruker BioSpin sales grew roughly 3.5% organically, driven by higher pricing and sales volume of NMR products, including NMR FoodScreeners and clinical research systems. The company also delivered a 1 GHz NMR system in the first quarter. Aftermarket sales within the LabScape business further contributed to segment growth. Conversely, Preclinical Imaging sales declined in the low single digits.

Sales for Bruker CALID contracted roughly 3% organically due to lower European academic demand, as well as weak MALDI Biotyper sales in China and the US in the first half of the year. Furthermore, sales of Detection MS products declined. These declines were partially offset by higher sales in the Optics Division and Daltonics businesses.

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Excluding the acquisition of Jordan Valley Semiconductors (see IBO 10/15/15), Bruker Nano Group sales contracted roughly 7% organically due to weak industrial and European academic markets. As such, sales for Bruker AXS declined and were flat for the Nano Surfaces Division. However, demand was positive for fluorescent microscopy products for neuroscience and cell research applications.

Geographically, total Bruker sales in Asia climbed roughly 5% organically, including mid-teens growth in China and a high single-digit decline in Japan. US sales similarly grew in the mid-single digits. European organic sales declined in double digits. Adjusted operating margin for the company improved 150 basis points to 14.8%.

For 2017, Bruker sales are projected to grow 1.5%–2.5% or 1%–2% organically. Adjusted operating margin is expected to improved 40 to 70 basis points.

Diagnostics Elevates QIAGEN Growth

Q4 2016

QIAGEN’s fourth quarter 2016 sales advanced 5.2% to $366.5 million. Organic sales grew at a similar 5% rate when excluding currency headwinds of 2.6% and slightly stronger growth contributions from acquisitions. For the first time in five years, the decline in US HPV sales had a negligible impact on total revenues.

Organic Molecular Diagnostics sales grew roughly 10%, or 11% excluding US HPV sales. This growth was driven by demand for the company’s tuberculosis testing product line QuantiFERON, for which sales jumped more than 25%. QIAsymphony consumables sales were also strong. Furthermore, the company noted a steady uptake for its new GeneReader NGS system.

Life Science sales were roughly flat organically to account for 50% of revenues. Applied Testing sales improved in the mid-single digits organically, led by demand for human ID and forensics products. Pharma and Academia sales each declined in the low single digits organically due to weak instrument demand.

All geographic sales figures are based on constant exchange rates but include acquisitions. Demand from emerging markets remained robust as sales from the company’s top seven emerging regions climbed 17% to account for 18% of revenues. This growth was driven by strong double-digit sales growth in China, as well as strength in South Korea, Turkey and India.

Overall, Asia-Pacific/Japan sales advanced 14% to account for 22% of revenues. Representing 45% of revenue, sales in the Americas grew 5%, including growth in the US and Brazil, but were weak in Mexico. Sales in the Europe/Middle East/Africa region climbed 10% to make up 33% of revenues. Total adjusted operating margin soared 412 basis points to 30.7% as a result of lower operating expenses.

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2016

Full-year reported and organic sales for QIAGEN expanded 4.5% to $1.34 billion. Acquisition growth of 1.8% was offset by currency headwinds. Overall, sales of consumables and other related products, and instrument sales grew roughly 5% and 2% organically to account for 87% and 13% of revenues, respectively.

Molecular Diagnostics sales advanced 6%, or 9% excluding US HPV sales. QuantiFERON sales climbed roughly 25% to account for nearly 11% of total revenues. QIAsymphony sales were also sturdy, as cumulative placements exceeded the company’s goal of 1,750 units and consumables grew double digits. According to the company, it placed nearly 60 GeneReader NGS systems in 2016 and attained roughly a 10% market share of newly placements benchtop oncology systems. However, the company expects to reach 20% of the total clinical-based sequencer market by 2020.

Accounting for 50% of revenues, Life Science sales improved 3% organically. Applied Testing and Pharma sales grew roughly 3% and 4% organically to make up 9% and 20% of revenues, respectively. Academia sales rose 1% organically.

Similar to above, geographic sales include acquisitions. Sales in the Americas and Asia-Pacific/Japan grew 5% and 11% to account for 47% and 21% of revenues, respectively. Despite weak spending in Germany especially in academic markets, the Europe/Middle East/Africa region grew 8% to make up 32% due to positive sales contributions in France, the UK, Turkey and the Middle East.

Adjusted gross margin slipped 62 basis points to 70.6%, and adjusted operating margin declined 58 basis points to 24.3%. The company reaffirmed its 2017 currency neutral sales growth of 6%–7%, or 5%­­–6% organically. First quarter sales are projected to grow 3%–4%, or 1%–2% organically.

Shimadzu Driven by LC Demand

For the fiscal third quarter ending December 31 2016, Shimadzu Analytical and Measuring Instrument (AMI) sales improved 0.4%, 7.3% excluding currency, to ¥50.7 billion ($463.2 million = ¥109.46 = $1) to account for 62% of company revenue. Segment sales were driven by robust strength in China as well as globally broad demand for LC products. Overall, aftermarket and instruments sales grew roughly 11% and 6% organically to account for 29% and 71% of AMI sales, respectively.

By product, LC and MS sales grew roughly 11% and 9% organically to account for 29% and 16% of segment sales, respectively. MS sales were strong in China, Japan and Western Europe, but declined in the US due to lower demand from healthcare customers. Sales of other analytical products, including GC, photometric analyzers and bio-related analyzers, combined grew in the low single-digits organically. Sales of other products such as surface analyzers, testing machines for transportation equipment and water quality measuring equipment each grew in the mid- to upper single digits organically.

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Sales in China jumped 20.8% organically due to strong demand for LC and MS products from pharmaceutical and CRO firms, as well as increased government funding for food testing and other large-scale projects. Sales in other Asian regions advanced 7.1% organically, driven by sales of LC and testing machines in Southeast Asia, as well as strong demand for LC and MS from pharmaceutical customers in India. Regional sales in Japan, which climbed 6.1%, were strong across most products lines, especially for LC, MS and surface analyzers from pharmaceutical, chemical and other industries.

Conversely, organic sales in Europe and North America declined 2.4% and 3.5%, respectively. US markets were negatively impacted by lower MS sales to healthcare customers, while Europe experienced lower academic and government demand in the eastern regions.

AMI operating margin contracted 157 basis points to 13.0% due to currency. The company lowered its fiscal 2017 AMI sales growth outlook by 50 basis points to 4.1%, resulting in revenues of ¥217.0 billion ($2.1 billion).

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