The declining US dollar and strong corporate profits propelled US equity markets to new multiyear highs in April. The Dow Jones Industrial Average, S&P 500 and NASDAQ climbed 4.0%, 2.8% and 3.3% for the month and are up 10.7%, 8.4% and 8.3% for the year, respectively. Yet, despite strong market activity, economic data remained ominous. First-quarter US GDP growth slowed to 1.8% from 3.1% in the fourth quarter to 1.8%. On April 11, the International Monetary Fund lowered its 2011 US economic growth forecast by 20 basis points to 2.8%. In addition, rising unemployment claims and inflated energy costs have distressed consumer spending.

Three of the four IBO Stock Indexes finished the month in positive territory, while the Process/Metrology/Motion Instrumentation Stock Index slipped 2.0%. The Diversified Instrumentation, Lab Consumables/Equipment and Laboratory Instrumentation Stock Indexes grew 7.6%, 6.4% and 6.3%, respectively.

Laboratory Instrumentation Stock Index

The Laboratory Instrumentation Index improved 6.3% in April to close at 703.32. Sixteen companies increased in value, and seven declined. Fluidigm led the Index, climbing 16%, while Helicos Biosciences fell 15%. Year to date, the Index has gained 6.6%, with 18 companies in positive territory and five losing ground. Cepheid has advanced the most, up 42%, and Pacific BioSciences is down 23%.

The majority of companies in the Index reported strong earnings. Cepheid raised its 2011 EPS guidance on April 20 by $0.01 to $0.31–$0.36, leading shares up 2.4% the following day. On April 26, Waters (see page 12), Illumina (see page 12) and Becton Dickinson all beat quarterly estimates. Waters raised its full-year EPS outlook by 4% to $4.80–$4.90, leading shares up 8.4%. Becton Dickinson boosted its 2011 EPS outlook by 2% to $5.53–$5.63. Illumina did not provide any guidance. Thermo Fisher Scientific and Pacific BioSciences beat EPS expectations on April 27. Thermo also raised its full-year EPS guidance by $0.05 to $4.05–$4.15, leading shares up 3.0%.

Other companies reported less favorable results. On April 27, Affymetrix announced lower-than-expected revenues (see page 12), leading shares down 2.9% the following day. Earlier in the month, on April 11, the company introduced its Axiom array for studying disease in the Han Chinese populations. Shares jumped 7.9%. Bruker (see page 12) and Harvard Bioscience missed earnings expectations on April 28, leading shares down 5.3% and 5.7%, respectively. Despite the shortfall, both companies maintained their full-year financial guidance: EPS of $0.90–$0.93 for Bruker’s Scientific Instruments segment and $0.41–$0.43 for Harvard Bioscience’s Life Science Research Tools business.

In other news, on April 6, Sequenom reported a licensing and comarketing agreement with New England Biolabs to commercialize research tools for epigenetics, leading shares up 4.5%. Pressure BioSciences filed a Form 8-K with the SEC on April 12, revealing a delisting notice from the NASDAQ Stock Market for failure to comply with the minimum stockholders’ equity requirement of $2.5 million. Shares were relatively unchanged. The following day, the company received $0.8 million as the first tranche of a $6.0 million private placement.

Deutsche Bank downgraded Bruker on April 11 from “Buy” to “Hold.” Zacks Equity Research initiated coverage of Affymetrix on April 15 with a “Neutral” recommendation. On April 19, William Blair initiated coverage of Pacific BioSciences with a “Market Perform” rating.

Process/Metrology/Motion Instrumentation Stock Index

The Process/Metrology/Motion Instrumentation Stock Index fell 2.0% to 541.69. Four companies traded higher, and three contracted. SDIX improved 6% to lead all companies, while Nanometrics slumped 11%. For the year, the Index has surged 20.3%, with all seven companies increasing by double digits. SDIX has the largest return to date, up 36%.

MTS Systems slid 2.5% on April 15 following a temporary suspension from US government contracts for failure to disclose two prior misdemeanors. On April 25, Veeco Instruments reported strong EPS results and maintained its full-year EPS guidance of more than $5.00. Shares climbed 4.3% the next day, despite a downgrade from Barclays Capital from “Overweight” to “Equal Weight.” Nanometrics beat analysts’ EPS consensus and forecast second-quarter EPS of $0.41–$0.47, yet shares fell 6.2% the following day.

Lab Consumables/Equipment Stock Index

The Laboratory Consumables/Equipment Stock Index grew 6.4% in April to 678.41. Five companies increased in value, led by Sigma-Aldrich, which gained 11%. Enzo lost the most value for the month and year, falling 5% and 24%, respectively. Year to date, the Index is up 8.3%, with four companies trading higher and two with negative returns. Techne has shown the largest price increase, rising 18%.

RAE Systems jumped 6.3% on April 4 after the company amended its merger agreement with Vector Capital to be acquired for $1.88 per share (see IBO 1/31/11). On April 26, Sigma-Aldrich raised its full-year EPS outlook by 4% to $3.60–$3.75, leading shares up 4.6%. Life Technologies (see page 12) and QIAGEN reaffirmed their full-year guidance on April 26 and 27, respectively. QIAGEN climbed 2.8% the following day. On April 13, HSBC Securities initiated coverage of QIAGEN with a “Neutral” rating.

Diversified Instrumentation Stock Index

The Diversified Instrumentation Stock Index grew 7.6% to 155.22. Six companies recorded gains, while Teledyne Technologies declined 2%. Agilent Technologies improved the most, climbing 11%. For the year, the Index has advanced 15.8%, with all companies trading higher, led by Mettler-Toledo, which has gained 24%.

The Index benefited from strong earnings reports, as AMETEK preannounced better-than-expected earnings on April 15 and raised its full-year EPS outlook by 9% to $2.20–$2.25. Shares jumped 5.8%. After beating first-quarter estimates on April 21, Danaher raised its full-year EPS guidance by 3% to $2.65–$2.75. Shares improved 3.5%. On April 26, Illinois Tool Works (ITW) increased its full-year guidance by 14% to $4.16-–$4.34, sending shares up 6.1%. On the same day, Roper Industries raised its 2011 EPS outlook by 3% to $3.97–$4.12, leading shares up 1.2%. The following day, the company was downgraded by Oppenheimer from “Outperform” to “Perform.” Teledyne Technologies crushed analysts’ estimates on April 27 and projected full-year EPS of $3.25–3.32. Shares climbed 4.3%.

International

In April, three Pacific Region companies traded lower, Hitachi High-Technologies rose 2% and Techcomp was flat. JEOL endured the largest decline for the month and year, falling 8% and 22%, respectively. Year to date, three companies have positive returns, led by Techcomp, which has improved 13%, and two have lost value.

On April 26, Hitachi High-Technologies reported full-year EPS ending March 31 of ¥129.07 ($1.56) (see page 12), compared with a loss of ¥20.55 ($0.22) a share. The company did not provide an earnings forecast due to the uncertain effects following the earthquake. Shares improved 1.3% the following day.

This month, nine European companies improved, four declined and Halma was flat. Biohit led all foreign companies, gaining 29%, while CyBio fell 5%. For the year, ten European companies have positive returns, three have contracted and one is unchanged. Renishaw leads all companies, up 44%, while Tecan is down 8%.

Exiqon jumped 6.8% on April 6 following the release of positive results for its diagnostic blood test for early detection of colorectal cancer. On the same day, Oxford Instruments preannounced that fiscal year 2011 results would top company expectations and that adjusted profit before tax would exceed £25 million ($40 million). Shares jumped 6.9%. On April 28, Biohit reported first-quarter EPS just above breakeven and slightly lower than a year ago, leading shares down 3.0%.

 Line Graph: IBO Instrument Industry Stock Index

         Lab Instrument Stock Index          S&P 500

 Apr-09  428.75                              209.26

 May-09  446.23                              220.37

 Jun-09  479.85                              220.41

 Jul-09  522.15                              236.75

 Aug-09  528.47                              244.70

 Sep-09  543.19                              253.44

 Oct-09  535.42                              248.43

 Nov-09  548.41                              262.68

 Dec-09  565.94                              267.35

 Jan-10  546.93                              257.47

 Feb-10  566.22                              264.81

 Mar-10  585.87                              280.38

 Apr-10  596.47                              284.51

 May-10  557.61                              261.19

 Jun-10  531.11                              247.12

 Jul-10  513.20                              264.12

 Aug-10  499.94                              251.58

 Sep-10  556.95                              273.61

 Oct-10  579.40                              283.69

 Nov-10  589.00                              283.04

 Dec-10  660.07                              301.53

 Jan-11  657.02                              308.36

 Feb-11  661.02                              317.14

 Mar-11  661.90                              317.88

 Apr-11  703.32                              326.93

 Cos. Date Rept. 2010 4Q Adj.EPS  Consensus  Vs.Est. EPS Growth  2009 4Q Adj.EPS

 Laboratory Instrumentation Index  

 AFFX 27-Apr     $0.00            $0.00      $0.00   NA          ($0.04)

 BDX  26-Apr     $1.38            $1.30      $0.08   9%          $1.27 

 BRKR 28-Apr     $0.14            $0.15      -$0.01  40%         $0.10 

 CPHD 20-Apr     $0.01            ($0.01)    $0.02   NA          ($0.07)

 HBIO 28-Apr     $0.07            $0.10      -$0.03  -22%        $0.09 

 ILMN 26-Apr     $0.35            $0.31      $0.04   67%         $0.21 

 PACB 27-Apr     ($0.66)          ($0.67)    $0.01   NA          NA

 TMO  27-Apr     $0.92            $0.88      $0.04   10%         $0.84 

 WAT  26-Apr     $1.04            $0.95      $0.09   28%         $0.81 

 Process/Metrology/Motion Instrumentation Index

 NANO 28-Apr     $0.45            $0.41      $0.04   61%         $0.28 

 VECO 25-Apr     $1.33            $1.21      $0.12   171%        $0.49 

 Lab Consumables/Equipment Index  

 LIFE 26-Apr     $0.85            $0.85      $0.00   -2%         $0.87 

 QGEN 27-Apr     $0.21            $0.21      $0.00   11%         $0.19 

 SIAL 26-Apr     $0.94            $0.90      $0.04   12%         $0.84 

 Diversified Instrumentation Index  

 AME 28-Apr     $0.56             $0.48      $0.08   56%         $0.36 

 DHR 21-Apr     $0.61             $0.57      $0.04   27%         $0.48 

 ITW 26-Apr     $0.91             $0.84      $0.07   44%         $0.63 

 ROP 26-Apr     $0.91             $0.87      $0.04   40%         $0.65 

 TDY 27-Apr     $0.87             $0.73      $0.14   28%         $0.68