In the second quarter of 2007, revenues for IBO’s Laboratory Sales Index grew a robust 13.8% to $4,083 million. Operating profit jumped 29.3% to $631 million, and operating margin climbed 190 basis points to 15.5% of sales. Strong organic and acquisition-related growth from Thermo Fisher Scientific, Bruker BioSciences, PerkinElmer and Agilent helped boost revenues and operating profits.

For the second quarter of 2007, 19 of the 22 companies in the Laboratory Instrument Sales Index reported earnings before this issue’s publication. For the other three companies (Horiba, Oxford Instruments and Shimadzu), modest growth rates are included.

Harvard Bioscience reported second quarter revenue growth of 12.2%, or 8.6% on a currency-neutral basis, to $20.4 million (see page 12). Organic growth increased 4.4%, primarily from sales of cell biology equipment, new spectrophotometers and plate readers, while acquisitions contributed 4.2%. International sales were strong, particularly in Europe, as the weak dollar continues to make the company’s products more attractive. Adjusted operating income improved 10.7% to $3.0 million, benefiting from increased product sales and foreign currency exchange rates, but was partially offset by the higher cost of product revenues. As a result, gross profit decreased 190 basis points to 48.9% of sales. Going forward, the company anticipated third quarter revenues in the range of $19.0–$20.0 million and year-end revenues of $80.0–$83.0 million.

Illumina’s second quarter revenues jumped 103.3% to $84.5 million and adjusted operating profit soared 98.0% to $12.9 million. Product revenue grew 104.1% to account for 88% of sales, led by sales of the HumanHap 550 and BeadChip, while Service and other revenue improved 110.3% to make up 12%. As of June 13, the company had received more than 75 orders for the Genome Analyzer. Subsequent to the second quarter, the company received an order for 20 Genome Analyzers from a single customer. The increased costs and expenses associated with the change in product mix led combined gross margin for products and services to fall 270 basis points to 64.3%. In an effort to improve profitability, the company is currently looking to add international manufacturing sites and implement a direct sales presence in Asia, particularly China. Ensuing the strong revenue growth for the first half of the year, the company increased fiscal 2007 revenue guidance by $30 million to $335–$345 million.

In the second quarter, Invitrogen’s sales grew 12.7% to $321.7 million and adjusted operating profits increased 19.9% to $67.7 million (see page 12). BioDiscovery sales climbed 9.9% to $222.8 million, and Cell Culture Systems revenue jumped 19.8% to $98.9 million. Favorable currency transactions contributed 2.0% to revenue growth for the whole company as well as each division. The BioDiscovery segment benefited from higher sales of cell biology product lines, molecular biology basics, timing of OEM orders and $5.4 million in licensing revenue resulting from a patent infringement legal settlement. In the Cell Culture Systems division, revenue growth was driven by double-digit sales increases for both production media and sera, including higher sales of research media. Revenue growth by region was 9% in the Americas, 20% in Europe and 4% in Asia Pacific. Adjusted operating profits increased 19.9% to $67.7 million, despite increased operating costs related to employee-related expenses. Gross margins declined 60 basis points to 63.7% as a result of higher sales in the Cell Culture Systems segment, which carry a lower profit margin. For 2007, excluding currency impact and a litigation settlement, the company anticipates revenue growth in the mid-single digits and EPS to climb three to four times revenue growth.

Luminex’s second quarter sales grew 32.3% to $17.5 million, while operating loss widened to $3.4 million from a loss of $0.3 million, due to higher operating expenses from the completed acquisition of Tm Bioscience (see IBO 12/15/06). The Assay Segment, which includes the acquisition, helped drive revenue growth, contributing $4.0 million to total sales. Technology Segment sales increased 2.0% to $13.5 million, led by service, royalty and consumables sales, which grew 34.0% to $1.1 million, 12.0% to $2.2 million and 8.3% to $3.3 million, respectively. Systems and peripheral component sales declined 7.1% as a result of lower average system prices, while “Other” revenue remained relatively flat.

OI was the only company in the Index to report a decline in second quarter sales, which dropped 1.3% to $6.5 million. Product sales improved 6.2% to $5.6 million, while Service revenue declined 31.4% to $0.91 million. Sales of Minicam air monitors, TOC Analyzers and GCs were strong, especially in the domestic markets. International sales benefited from increased GC sales in Europe. The company expects service revenue to increase in the third quarter from its US Army contract, but anticipates lower service revenues compared to last year. Operating income improved 15.3% to $0.23 million as a result of higher profit margins and decreased SG&A expenses. The company expects minimal sales growth in the second half of the year.

QIAGEN NV’s second quarter revenues grew 19.3%, or 15% on a currency-neutral basis, to $135.0 million, and adjusted operating profits improved 26.6% to $35.1 million (see page 12). Consumables and Instruments sales grew 19% and 32% to account for 89% and 10% of net sales, respectively, while “Other” revenue declined 19% to make up just 1% of sales. Favorable foreign exchange rates contributed 4%, 3% and 4% to segment revenue growth, respectively. Completed on July 30, the Digene acquisition (see IBO 6/15/07) was not included in this quarter’s results. The company increased its full-year 2007 EPS guidance by 3% to $0.62–$0.64. For the combined company, QIAGEN expects full-year revenues of $614–$635 million and EPS of $0.55–$0.59.

Strategic Diagnostics reported second quarter revenue growth of 19.2% to $6.7 million (see page 12). Antibody revenue improved 42.0% to $3.5 million, driven primarily by sales of bulk antibodies and custom antibody services. Food safety revenue edged 2.0% higher to $1.8 million, while Water and Environmental products revenue remained flat at $1.4 million. Sales for the RapidChek line of food pathogen testing products grew 38%, but were offset by a 32% decline in Agricultural and GMO testing products. Despite an increase in operating expenses, the company recorded an operating profit of $0.22 million compared to a loss of $0.48 million in the previous year, as a result of lower manufacturing expenses. Gross margins climbed 900 basis points to 60.0% of sales in response to supply chain optimization efforts and the introduction of new products and services.