US equity markets vacillated for most of February. However, rising confidence over sustained quantitative easing measures for the foreseeable future overshadowed most of the sequestration concerns. In addition, better-than-expected consumer confidence, an improved housing market and positive manufacturing momentum helped drive the Dow Jones Industrial Average and S&P 500 up 1.4% and 1.1% for the month, respectively. The NASDAQ declined 2.9%. Year to date, the Dow, S&P 500 and NASDAQ have gained 7.3%, 6.2% and 1.0%, respectively.

Only the Laboratory Instrumentation Stock Index increased this month, rising 3.0%. The Consumables/Equipment, Process/Metrology/Motion Instrumentation, and Diversified Instrumentation Stock Indexes declined 2.8%, 0.5% and 0.3%, respectively.

Laboratory Instrumentation Stock Index

The Index climbed 3.0% in February to close at 741.95. Eleven companies advanced, and seven declined. Harvard Bioscience led the Index, climbing 16%, while Pressure BioSciences fell 12%. For the year, the Index has increased 12.0%, with 14 companies trading higher and four losing ground. Pressure BioSciences has sustained the largest return, rising 80%. Transgenomic is down 26%.

For the Index companies that reported in February, EPS results were mostly ahead of expectations, and outlooks were cautiously optimistic. Despite a 31% drop in full-year EPS to $0.39, Luminex’s results were above expectations. The company projected 2013 sales to grow 9%–14%, which was in line with consensus. Shares fell 1.5% the next day.

On February 5, Becton Dickinson raised its fiscal adjusted full-year outlook by 1.6% to $5.69–$5.72 based on continuing operations. Shares rose 2.9%. On February 12, Fluidigm projected revenue growth of 22%–26% for 2013, leading shares up 1.0% the next day. Bruker reported strong fourth-quarter 2012 results on February 19 (see page 12) and projected adjusted 2013 EPS to grow 6%–10% to $0.88–$0.91, which was in line with analysts’ estimates. Shares jumped 10.6%. On February 26, Bio-Rad Laboratories far exceeded adjusted fourth-quarter 2012 EPS estimates, leading shares up 5.3% the next day. On February 26, Accelrys reported that full-year 2012 EPS grew 3% to $0.35 and projected 2013 EPS to grow 4% to $0.36–$0.39. Shares declined modestly the next day.

On the negative side, on February 5, Pacific Biosciences announced a wider-than-expected fourth-quarter 2012 EPS loss. The company also completed a $20.5 million debt financing, including promissory notes and additional warrants for 5.5 million shares at an exercise price of $2.63 per share. Shares fell 6.3% the next day. In other financial deals, on February 6, Pressure BioSciences fell 11.3% following a $2.0 million private placement, which included convertible preferred stock and additional warrants. Illumina completed the acquisition of Verinata Health on February 21. Shares rose 1.4% the next day. On February 1, JP Morgan Chase upgraded Thermo Fisher Scientific from “Neutral” to “Overweight.”

Process/Metrology/Motion Instrumentation Stock Index

The Index declined 0.5% to 614.58 in February. Two companies traded higher, and five declined, led by SDIX, which contracted 11%. For the year, the Index is up 8.5%, with five companies in positive territory and two declining. FEI has gained the most value for both the month and year, climbing 4% and 14%, respectively. Veeco Instruments is down 9% for the year.

FEI reported on February 6 better-than-expected 2012 adjusted EPS growth of 18% to $2.85. The company expects first-quarter adjusted EPS to be $0.61–$0.68. Shares traded slightly lower the next day. Nanometrics projected on February 4 a wider-than-expected adjusted first-quarter EPS loss of $0.25–$0.33 due to higher operating expenses and slower demand from its largest customers. Zygo fell 2.5% on February 7 after missing adjusted fiscal second-quarter estimates as a result of lower demand from semiconductor customers. On February 8, Veeco provided a cautious 2013 outlook, especially for its MOCVD business. Shares declined 4.7%. On February 19, JP Morgan Chase cut its rating of the company to “Neutral” from “Overweight” and lowered EPS estimates by 15% to $1.00. Shares fell 1.7%.

Lab Consumables/Equipment Stock Index

The Index fell 2.8% this month to 724.83. Four companies declined in value, and three increased. Enzo Biochem had the highest return, up 4%, while Life Technologies fell 10%. Year to date, the Index has risen 10.5%, with six companies advancing and Techne down 1%. Life Technologies leads the Index, having gained 19%.

On February 4, Life Technologies reported that adjusted full-year EPS grew 7% to $3.98, which was mostly due to a repurchase plan of 13.8 million shares. The company projected adjusted 2013 EPS to be $4.30–$4.45, which was slightly higher than analysts’ mid-range outlook of $4.35. Shares rose 1.8% the next day. However, on February 20, shares dropped 8.3% on heavy volume as speculation over a potential buyout tapered (see page 2).

Techne missed adjusted fiscal second-quarter EPS consensus on February 5 due to currency, sending shares down 1.8%. On February 7, Sigma-Aldrich projected 2013 EPS to grow 6%–9% to $4.10–$4.20. Shares fell 1.4%. On February 13, the company raised its dividend by 7.5% to $0.22. Kewaunee Scientific reported strong fiscal third-quarter EPS results on February 26 due to backlog and reduced operating expenses. Shares climbed 2.0% the next day. On February 27, Pall reaffirmed its full-year EPS outlook of $2.95–$3.15. Shares traded slightly higher the next day.

On February 5, Life Technologies was downgraded by Credit Agricole from “Buy” to “Outperform” and by Leerink Swann from “Outperform” to “Market Perform.” On the same day, ISI Group upgraded the company from “Cautious” to “Neutral.” On February 6, both Citigroup and Goldman Sachs initiated Sigma-Aldrich with a “Neutral” rating. The company was downgraded on February 11 by UBS from “Neutral” to “Sell” due to valuation.

Diversified Instrumentation Stock Index

The Index slipped 0.3% for the month to 168.01. Five companies increased in value, and three contracted. Agilent Technologies recorded the largest decline, falling 7%. For the year, the Index is up 6.2%, with all eight companies trading higher. Teledyne Technologies has advanced the most for both the month and year, having gained 8% and 13%, respectively.

On February 6, Mettler-Toledo raised its 2013 adjusted EPS outlook by 2.7% to $10.30–$10.55 for growth of 7%–9%. Adjusted first-quarter EPS is projected to increase 5%–8% to $1.75-$1.80. Shares rose 2.3% the next day. On February 7, Xylem missed fourth-quarter 2012 sales expectations, leading shares down 3.4%. The company also increased its quarterly dividend by 15% to $0.11 and projected 2013 adjusted EPS to grow 5% to $1.80–$1.90. On February 14, Agilent cut its fiscal 2013 outlook by 3% to $2.70–$3.00 as a result of softer demand in the communication and defense markets and a shift in currency. Shares fell 5.2% the next day.

International

For the month, six Pacific Region companies improved, while Shimadzu stumbled 1%. Year to date, five companies have increased in value and two have declined, led by Techcomp, which has fallen 6%. Precision System Science leads all Pacific Region companies for both the month and year, having gained 19% and 290%, respectively.

GL Sciences reported on February 5 that fiscal third-quarter EPS grew 137% to ¥35.13 ($0.43), leading shares up 6.9%. On February 14, HORIBA reported a 20% increase in fourth-quarter 2012 EPS to ¥78.26 ($0.98). The company’s 2012 dividend increased 25% to ¥50 ($0.63) due to a 60th anniversary commemorative dividend of ¥10 per share. For 2013, the company projected sales to increase 10.5% but net income to decline 14% to ¥6,300 ($70 million) due to currency and other non-operating losses. Shares climbed 2.3% the next day. On February 13, Shimadzu reported a 40% decline in fiscal third-quarter EPS to ¥0.73 ($0.01) and lowered its fiscal year net income outlook by 23% to ¥7,000 million ($87.5 million). Shares fell 3.8 %. Techcomp reported on February 28 that full-year EPS fell 62% to $1.33.

In February, 12 European companies recorded positive returns, and two declined. Tecan declined the most, falling 4%. For the year, 10 companies are trading higher, three have declined and Datacolor is unchanged. Sartorius leads all companies for both the month and year, having gained 19% and 34%, respectively. Alpha MOS has sustained the largest decline for the year, falling 13%.

On February 14, Analytik Jena reported a fiscal first-quarter EPS loss of €0.01 ($0.01), compared with a profit of €0.25 ($0.34) a year ago, due to currency and a negative contribution from its minority stake in AJZ Engineering. Shares declined 2.1% the next day. On February 12, Biotage reported that fourth-quarter 2012 EPS grew 46% to SEK 0.19 ($0.03) based on continuing operations. Shares slipped 1.1%. On February 20, Spectris reported that adjusted full-year EPS grew 11% to £1.38 ($2.18). Shares were marginally higher. On February 1, Precision System Science significantly raised its half-year EPS outlook from ¥76.70 ($0.96) to ¥1,687.49 ($21.5) due to the timing of orders and currency. Shares jumped 14.6%. On February 28, Sartorius proposed a 10% dividend increase to €1.10 ($1.41) per share for 2012.