Sales growth slowed in the calendar-year second quarter for US publicly held analytical instrument and laboratory product businesses, as European and industrial sales weakened. In addition, the strengthening of the US dollar against the euro negatively affected results. Quarterly revenues for the eight businesses discussed on pages 9–11 grew 3.1% (see table, page 9). Excluding acquisitions, revenues inched up 0.8%. Organically, revenues increased 3.6%.

Sales growth for all businesses, except Illumina and Waters, slowed sequentially. However, organic sales growth increased sequentially for Agilent Life Sciences (LS), Illumina and Waters. However, Illumina recorded a sales decline year over year, its fourth straight quarter of such a decline.

Operating profits for the eight businesses increased 4.0%, dragged down from the previous quarter by lower sales volumes, currency effects, product mix and pricing pressure. Agilent, Bruker and PerkinElmer specifically commented on the impact of lower pricing during the quarter. Thermo Fisher Scientific Analytical Technologies (AT) and PerkinElmer recorded double-digit increases in operating profits, helped by acquisitions. Bio-Rad Laboratories Life Science (LS) and Bruker showed double-digit declines in operating profits.

In terms of end-user markets, the biggest slowdown in the quarter was in industrial markets, as worsening macroeconomic conditions seemingly caused customers to delay orders. In particular, Agilent Chemical Analysis (CA), Bruker and Waters noted weakening industrial markets. However, broader-based Thermo AT reported overall growth for its industrial sales. Following a steady record of growth in recent years, sales to applied markets also slowed in the quarter. Agilent CA, Bruker and Waters each reported softer sales to such markets. Academic and government sales results varied based on product line and geographic location, but European sales to these markets were down for most vendors.

Europe was an important factor for instrument and lab product businesses in the quarter, as slowing industrial, government and academic purchases in the region and a stronger euro weakened growth. Bruker and PerkinElmer, which had been relatively immune from the Western European slowdown, noted the change this quarter, with each commenting on the weakness. Chinese sales continued to grow for all companies. However, Agilent LS and CA, Bruker and PerkinElmer each reported slowing sales in selected end-markets in China.

In contrast to previous quarters, Agilent LS and Waters reported softer HPLC sales. However, MS sales recorded another good quarter of sales growth, according to Agilent LS and Thermo AT. Desktop sequencing sales also remained strong, according to Illumina and Life Technologies. Another highlight was the bioproduction businesses of Life Technologies and Thermo AT.

Companies noting new cost-containment actions during the quarter were Agilent Technologies and Life Technologies. PerkinElmer delayed productivity investments, while Bruker announced it will initiate extensive changes in its cost structure and operating expenses. PerkinElmer and Thermo Fisher Scientific AT noted the continuation of broader, ongoing restructuring efforts.

Overall, the businesses forecast a continuation of current sales conditions, with lower expectations for industrial and Western European markets. As the table below shows, Agilent, Bruker, Thermo and Waters lowered their sales forecast for fiscal 2012 following the end of the second quarter.

Company write-ups are based on company financial reports, SEC filing, conference call presentations and discussions, and investor presentations.

 CY2Q 2012 Results  

                                         Revenues                         Rev. Growth Summary            Adj.Operating Profit

                                ($M)  % of Co.Rev.  % Growth   % Org.Growth  % Acq.Effect  % Curr.Effect   ($M)   % Growth

 Agilent Tech. (LS + CA)       $772.0     45%         0.8%           4%           0%            -3%       $137.0     5.4%

 Bio-Rad Laboratories (LS)     $162.4     32%        -4.4%          -2%           1%            -4%         $5.4   -46.0%

 Bruker (BSI)                  $397.0     94%         5.1%          10%           2%            -7%        $33.4   -32.9%

 Illumina                      $280.6    100%        -2.4%          -2%           0%             0%        $78.9    -0.6%

 Life Technologies             $949.3    100%         0.9%           1%          -1%             0%       $271.3     3.2%

 PerkinElmer                   $521.8    100%         8.9%           5%           8%            -4%        $89.7    27.6%

 Thermo Fisher Scientific (AT) $999.5     32%         7.6%           5%           6%            -4%       $174.9    10.0%

 Waters                        $451.5    100%         0.9%           4%           0%            -3%       $130.2     4.9%

                             $4,534.1                 3.1%           4%           2%            -3%       $920.8     4.0%

 Agilent FY12 Q3

         Rev.($M)  % Total Rev.  % Rev.Growth   % Org.Growth

 LS    

 Sales      $391       23%           2%              5%

 Orders     $373                    -2%              1%

 CA    

 Sales      $381       22%           0%              3%

 Orders     $372                    -7%             -4%

 Illumina 2Q FY12

              Revenue($M)   % Rev.Grow.   % of Rev.

 Consumables    $183.7         15.5%        65%

 Instrument      $72.2        -32.3%        26%

 Other Products   $2.9        -29.5%         1%

 Service & Other $21.8         23.8%         8%

 Life Technologies 2Q FY12

                       Rev.($M)   % Org.Grow.   % of Rev.

 Research Consumables   $402.8        1.3%         42%

 Genetic Analysis       $353.1       -5.7%         37%

 Applied Sciences       $193.6       13.6%         20%

 PerkinElmer 2Q FY12

                     Rev.($M)   % Grow.   % Acq.Effect   % Curr.Effect   % Org.Grow.

 Human Health    

 Sales                $258.4     18.1%         17%             -4%            4%

 Adj. Op. Profit       $56.4     27.0%   

 Envir. Health     

 Sales                $263.4      1.2%          0%             -4%            5%

 Adj. Op. Profit       $43.3     18.0%

 Waters 2Q FY12 

                        % Rev.Growth    % Segment Rev.

 Waters Div.  

 Instrument Systems         -1.2%              51%

 Chemistry Consum.          -3.1%              18%

 Service                     4.0%              31%

 TA   

 Instrument Systems          7.2%              75%

 Service                    11.8%              25%