US equity markets traded at record levels in April due to stronger-than-expected corporate earnings and additional monetary policy easing in China. However, weak US manufacturing, durable goods orders and GDP data caused equity markets to retract toward the end of the month. US economic growth nearly stalled in the first quarter, expanding at a modest 0.2% pace due to extreme weather conditions, the strong US dollar and port disruptions on the West Coast. In addition, the Federal Reserve downgraded its view of the economy, potentially delaying any interest rate hikes until at least the third quarter. For the month, the Dow Jones Industrial Average, S&P 500 and NASDAQ advanced 0.4%, 0.9% and 0.8%, respectively. Year to date, the Dow, S&P 500 and NASDAQ are up 0.1%, 1.3% and 4.3%, respectively.

Laboratory Instrumentation Stock Index

The Index contracted 2.8% in April to close at 226.37 but is up 1.8% for the year. A majority of the companies in the Index declined for the month, led by Pacific Biosciences, which fell 11.6%. NanoString Technologies jumped 17.2%.

Several companies, Affymetrix, Illumina and Waters, reported better-than-expected first quarter revenues and adjusted EPS results. Illumina easily beat expectations on April 21, as first quarter adjusted EPS jumped 72% to $0.91 as a result of growing clinical demand, increased instrument margins and a higher-than-expected tax benefit. The company raised its full-year adjusted EPS guidance from $3.12–$3.18 to $3.36–$3.42. Despite the strong results, shares slipped 0.7% for the month.

Similar to Illumina, on April 28, Waters beat first quarter adjusted earnings consensus by $0.19 per share. EPS climbed 32% to $1.21 as a result of strong demand from pharmaceutical markets and increased operating margins. The company raised its 2015 adjusted EPS outlook from $5.55–$5.80 to $5.67–$5.87. Second quarter adjusted EPS range is expected to be $1.20–$1.30. Shares traded modestly higher for the month, up 0.7%.

Affymetrix beat first quarter adjusted EPS consensus on April 29 due to strong Genetic Analysis sales and expanding margins. Earnings soared 233% to $0.10 per share. The company maintained its currency neutral mid-single-digit revenue growth forecast for 2015. As a percentage of sales, full-year adjusted EBITDA is projected to be in the range of 16%–18%, and adjusted gross margin is expected to be roughly 60%. Shares fell 3.4% for the month.

Thermo Fisher Scientific and PerkinElmer also beat first quarter adjusted EPS consensuses but missed revenue expectations. On April 21, Thermo recorded quarterly sales growth of just 0.5% (see page 12) due to currency headwinds. The company raised the lower range of its EPS guidance by $0.03 to $7.25–$7.40 as result of margin improvements and the acquisition of Advanced Scientifics (see IBO 2/15/15). Nonetheless, shares fell 6.4% for the month.

On April 30, PerkinElmer lowered its 2015 adjusted EPS from $2.58–$2.64 to $2.54–$2.60 due to currency. Second quarter adjusted EPS are expected to be $.057–$0.59. Shares were marginally higher for the month.

FEI beat first quarter adjusted EPS expectations on April 28 and reported sales in line with consensus (see page 12). The company reaffirmed its full-year adjusted EPS guidance of $3.40–$3.70, matching analysts’ expectations. Shares slipped 1.2% for the month.

On the negative earnings side, Harvard Bioscience missed first quarter adjusted EPS estimates and cut its 2015 adjusted EPS outlook from $0.20–$0.21 to $0.14–$0.16 due to currency and weak academic and government sales. Shares fell 4.6% for the month.

In other financial news, Agilent Technologies disclosed in an April 20 SEC filling that it received an unsolicited “mini-tender” offer from TRC Capital to purchase up to 2.5 million shares at $41.55 per share. Agilent urged shareholders to reject the bid due to the below-market offer price. On April 27, the company announced that it resolved the FDA compliance issues related to its Dako Denmark business.

On April 4, Stephens initiated coverage of Pacific Biosciences with an “Equal Weight” rating and a $6.50 price target. Leerink Swann upgraded Bruker on April 6 from “Market Perform” to “Outperform,” and raised its price target from $21 per share to $24. Bank of America downgraded FEI on April 17 from “Buy” to “Neutral.”

Diversified Instrumentation Stock Index

The Index fell 3.5% to 180.56 for the month and is down 1.9% year to date. All companies declined in price except Xylem, which advanced 5.7%. The company beat first quarter adjusted EPS on April 30 due to share buybacks. During the quarter, the company repurchased 1.4 million shares worth $50 million. Although Xylem lowered its 2015 adjusted EPS range by $0.05 to $1.80–$1.90 due to currency, estimates were in line with analysts’ consensus.

Corning recorded the sharpest decline in the Index, sliding 7.7% for the month, as the company missed revenue expectations on April 22. Credit Agricole downgraded the company on April 29 from “Underperform” to “Sell.”

Like Corning, Honeywell, Illinois Tool Works (ITW), Roper Technologies (formerly Roper Industries) and Teledyne Technologies all beat first quarter adjusted EPS estimates but fell short of revenue expectations. Earnings for these companies benefited from improved margins, cost controls and share repurchases.

On April 17, Honeywell raised the lower end of its 2015 adjusted EPS outlook by $0.05 to $6.00–$6.15. Roper raised its 2015 adjusted EPS guidance on April 27 from $6.70–$6.94 to $6.75–$6.95 primarily due to acquisitions. The company projected second quarter adjusted EPS of $1.59–$1.64. Conversely, on April 21, ITW lowered its full-year adjusted EPS guidance from $5.15–$5.35 to $5.00–$5.20 due to currency and lower equipment-related revenue. Teledyne lowered its 2015 adjusted EPS on April 30 from $5.71–$5.76 to $5.60–$5.65 due to currency.

Both Danaher and AMETEK reported first quarter adjusted EPS in line with expectations. On April 23, Danaher lowered its 2015 adjusted EPS outlook from $4.30–$4.40 to $4.23–$4.33 due to currency. Projected second quarter adjusted EPS of $1.01–$1.05 were below analysts’ expectations. On April 29, AMETEK maintained its full-year adjusted EPS outlook of $2.58–$2.63. However, second quarter adjusted EPS of $0.63–$0.64 were below consensus. Earlier in the month on April 2, the company increased its share repurchase authorization by $350 million.

International

Asia Pacific equity markets were mostly strong in April, including an 18.5% and 13.0% increase for China’s Shanghai Composite and Hong Kong’s Hang Seng. China tightened margin restrictions in an effort to curb its soaring stock markets, which traded at a seven-year high. Japan’s Nikkei 225 improved 1.6%. European Indexes were inconsistent, as Germany’s DAX fell 4.3% and the UK’s FTSE 100 advanced 2.8%.

Prices for the Pacific Rim companies in the IBO Stock Table were mixed. Techcomp recorded the largest gain, climbing 28.3%, while Hitachi High-Technologies declined 4.8%. On April 28, Hitachi reported that fiscal full-year EPS ending March 31 jumped 56% to ¥204.52 ($1.70), which was ahead of the company’s previous forecast.

Prices for the UK-based and other European companies in the IBO Stock Table also varied. Analytik Jena was removed from the table following its delisting from the Frankfurt Stock Exchange (see IBO 3/31/15). Among the list of European companies, Exiqon recorded the strongest gain, climbing 23.4% for the month, while Scientific Digital Imaging contracted 11.8%.

Like Exiqon, Sartorius jumped double digits for the month, climbing 21.2%. On April 20, the company reported that adjusted first quarter EPS soared 68% to €1.29 ($1.45), driven by strong growth in the Bioprocess Solutions division and a weak year-over-year comparison. The company raised its full-year currency neutral revenue growth outlook from 4%–7% to 6%–9%. It also raised its 2015 EBITDA margin by 50 basis points to roughly 22% of sales.

Biotage advanced 7.2% for the month. On April 28 the company reported that first quarter EPS climbed 142% to SEK 0.12 ($0.03). The following day, the company authorized a share repurchase program.

On April 14, Horizon Discovery reported that its 2014 EPS loss widened 23% to 9.2 pence ($0.15). However, sales jumped 79% due to acquisitions and demand for genome-editing services and molecular diagnostic–reagent products. Gross margins improved 300 basis points to 55% of sales, and the company’s customer base grew 171% to 955. Shares contracted 5.7% for the month.

On April 24, Spectris preannounced organic sales growth of 1% for the first quarter, led by demand in Europe but partially offset by declines in the US and Asia Pacific. BNP Paribas upgraded the company on April 17 from “Underperform” to “Neutral.” In other ratings news, Liberum Capital downgraded Oxford Instruments on April 15 from “Buy” to “Hold.”