US equity markets wavered in March due to the Federal Reserve’s ambiguous wordplay on raising interest rates and concerns over corporate profits due to the strengthening US dollar. The Fed continues to be unnerved by the fragility of the economy and growing market risks associated with loose monetary policies. The latest US GDP estimate for the fourth quarter 2014 was reduced by 20 basis points to 2.2% as a result of lower inventory and equipment investments, and after-tax corporate profits. In addition, durable-goods orders for February were weaker than expected. However, inflation remained below the Fed’s 2.0% target rate. For the month, the Dow Jones Industrial Average, S&P 500 and NASDAQ declined 2.0%, 1.7% and 1.3%, respectively. For the first quarter, the S&P 500 and NASDAQ are up 0.4% and 3.5%, respectively. The Dow is down 0.3%.

Laboratory Instrumentation Stock Index

The Index improved 0.7% in March and advanced 4.7% for the first quarter to close at 233.00. Just over half the companies in the Index traded higher this month, led by Cellular Dynamics, which soared 202.6%. The company agreed to be acquired by Fujifilm on March 30 for $307 million (see page 2), leading shares up 106.8%. On March 5, Cellular Dynamics easily beat fourth quarter 2014 revenue (see page 12) and EPS estimates due to strong demand for iCell Hepatocytes and stem cell–banking agreements.

Several other companies reported earnings this month. VWR exceeded fourth quarter 2014 EPS expectations on March 4, but projected 2015 adjusted EPS of $1.42–$1.50, slightly below consensus due to currency. On March 19, the company priced its €503.8 million ($536.0 million) private senior notes offering at 4.63% due in 2022. The offering, which closed on March 25, will be used to repay outstanding debt. Shares climbed 5.7% for the month.

Both Kewaunee Scientific and Enzo Biochem missed quarterly revenue projections. On March 3, Kewaunee Scientific reported that EPS for the fiscal third quarter ending January 31 declined 18% to $0.18 due to lower domestic sales and unfavorable product mix. On March 12, Enzo Biochem reported an EPS loss of $0.09 for the fiscal second quarter ending January 31, in line with expectations.

In other financial news, on March 17, Moody’s Investors Services downgraded Becton, Dickinson’s senior unsecured ratings from “A3” to “Baa2.” The downgrade was attributed to the company’s debt holdings and enlarged exposure to the US health care capital-equipment market following the completed acquisition of CareFusion. On March 24, the company was rumored to be in the process of divesting its noncore respiratory business in order to free up capital and improve its balance sheet.

Diversified Instrumentation Stock Index

The Index declined 1.3% for the month to 187.15, but is up 1.7% year to date. Most companies traded lower, led by Corning, which fell 7.0%. Teledyne Technologies climbed 5.9% for the month.

On March 20, Goldman Sachs upgraded Honeywell from “Buy” to “Conviction Buy,” with a price target of $120 per share.

International

Asia Pacific equity markets traded predominantly higher in March, including 13.2% and 2.2% increases for China’s Shanghai Composite and Japan’s Nikkei 225, respectively. Disappointing manufacturing data in both regions were eclipsed by continued accommodating monetary policies. India’s Mumbai Sensex fell 4.8% in March due to growing geopolitical tension in Yemen.

Prices for the Pacific Rim companies in the IBO Stock Table were mixed. JEOL recorded the largest gain, climbing 13.9%, while Precision System Science declined 10.3%.

European Indexes were also mostly in positive territory, led by Germany’s DAX, which climbed 5.0% for the month and is up 22.0% year to date. The UK’s FTSE 100 declined 2.5% for the month.

Prices for the UK-based companies in the IBO Stock Table were mixed, as Oxford Instruments and Abcam withstood the negative market sentiment to advance 10.6% and 3.0% for the month, respectively. Scientific Digital Imaging lost the most value, falling 15.0% for the month.

On March 9, Abcam reported that adjusted EPS expanded 7.3% to 9.38 pence ($0.15) for the six months ending December 31, 2014. The company’s interim dividend increased 7.5% to 2.29 pence ($0.04) as a result of strong sales growth and a reduced tax rate. However, Investec downgraded the company on March 18 from “Buy” to “Hold.” On March 27, a major insider sold 2.5 million shares on the open market for a total value of £11.5 million ($17.2 million).

Among other European companies, on March 18, Tecan reported that full-year 2014 EPS declined 13.1% to CHF 3.57 ($3.60) due to increased sales and market expenses as well as acquisition costs. The company expected 2015 currency-neutral sales to grow in double digits, led by acquisitions and product introductions.

On March 3, Merck KGaA reported that fourth quarter 2014 adjusted EPS grew 7.5% to €1.14 ($1.38) and full-year 2014 adjusted EPS advanced 4.8% to €4.60 ($5.58). The company also increased its annual dividend by 5.3% to €1.00 ($1.21), and projected slightly higher organic sales and EBITDA growth for 2015. On March 17, the company announced the placement of $4 billion in bonds consisting of five tranches with different maturities to help fund the acquisition of Sigma-Aldrich (see IBO 9/30/14). According to a March 20 Reuters report, Merck’s Deputy Chief Executive Stefan Oschmann will be promoted to replace current CEO Karl-Ludwig Kley, whose contract ends in April 2016.

Based on Analytik Jena’s new calendar-year reporting period, fourth quarter EPS loss was €1.38 ($1.67), compared to a loss of €0.03 ($0.04). Shares were virtually unchanged as the company announced on March 26 that it would no longer be listed on the Frankfurt Stock Exchange.