The US equity markets wavered in April as a result of mixed earnings and economic data. While manufacturing reports and consumer sentiment improved, the housing markets and GDP growth concerned investors. First quarter US GDP grew at a lackluster 0.1%, which was below analysts’ expectations of 1.1% and significantly lower than the 2.6% growth in fourth quarter 2013. In spite of the weak economic performance, the Federal Reserve lowered its monthly bond purchases by another $10 billion to $45 billion. Nonetheless, the Dow Jones Industrial Average improved 0.7% to close at a record high, and the S&P 500 progressed 0.6%. The NASDAQ fell 2.0%. For the year, the Dow is roughly flat, the S&P 500 has gained 1.9% and the NASDAQ is down 1.5%.

The IBO Stock Indexes were mostly depressed with the exception of the Diversified Instrumentation Stock Index, which advanced 0.4%. The Process/Metrology/Motion Instrumentation Stock Index contracted the most, falling 13.8%. The Laboratory Instrumentation and Lab Consumables/Equipment Stock Indexes declined 5.4% and 0.1%, respectively.

Laboratory Instrumentation Stock Index

The Index fell 5.4% in April to close at 995.94, with a majority of companies trading lower. Year to date, the Index has gained 2.1%. Accelrys was removed from the Index after Dassault Systèmes completed its acquisition of the company on April 28 (see IBO 1/31/14).

Luminex was one of the few companies in the Index to increase in value this month, as it climbed 6.1%. Shares jumped 17.4% on April 29 after the company soundly beat analysts’ first quarter adjusted EPS expectations and reaffirmed its 2014 revenue guidance of $225–$240 million. Similarly, on April 22, Illumina exceeded first quarter adjusted EPS expectations and raised its 2014 EPS outlook 7% to $2.10–$2.15. While shares climbed 3.9% the next day, profit taking led to a 8.6% decline for the month.

Like Illumina, several other companies contracted after posting better-than-expected first quarter adjusted EPS results and elevating guidance. On April 23, Thermo Fisher Scientific raised its 2014 adjusted EPS outlook by 1% to $6.80–$6.95. Yet shares declined the following day and were down 5.2% for the month. On April 24, PerkinElmer raised its 2014 adjusted EPS by 1% to $2.42–$2.46, in line with expectations. However, shares fell 2.9% the next day and dropped 6.9% for the month.

Cepheid beat first quarter adjusted EPS on April 17 and maintained its full-year revenue expectations. However, the company widened its projected 2014 adjusted EPS loss by 26% to $0.22–$0.27 due to operational expansion in emerging markets. Shares fell 4.4% the following trading day and were down 15.7% for the month.

Shares of Waters also slumped after the company lowered its outlook. The firm missed first quarter adjusted EPS on April 29 due to slower demand in Asia, order delays in the US and currency. It lowered its 2014 EPS outlook from $5.35–$5.55 to $5.25–$5.50, sending shares down 8.5%. For the month, Waters fell 9.1%.

Despite several company sell-offs, there were a number of analyst upgrades this month. Illumina was upgraded by Macquarie from “Neutral” to “Outperform” with a price target of $170 on April 2 and by Maxim Group from “Hold” to “Buy” with a price target of $205 on April 23. JMP Securities upgraded Cepheid on April 9 from “Market Perform” to “Market Outperform” and set a price target of $58 per share. Fluidigm was upgraded by Leerink Swann from “Market Perform” to “Outperform” on April 14 with a price target of $52 and by Mizuho from “Neutral” to “Buy” on April 23. Conversely, on April 9, ISI downgraded PerkinElmer from “Buy” to “Neutral.”

Process/Metrology/Motion Instrumentation Stock Index

The Index slumped 13.8% to 720.61 in April, with all companies losing ground except Zygo, which soared 26.7%. The company jumped 32.4% on April 11 following the proposed $280 million acquisition by AMETEK (see IBO 4/15/14). For the year, the Index is down 6.7%.

FEI recorded the biggest decline for the month for the Index, falling 22.8%. On April 30, shares crashed 10.5% after the company missed adjusted first quarter EPS and lowered its full-year sales growth from 10%–14% to 8%–10%. Second quarter GAAP EPS are projected to be $0.65–$0.75.

Both Nanometrics and MKS Instruments fell 9.5% and 5.9% for the month, respectively, after lowering forecasts. On April 29, Nanometrics reduced the midpoint of its full-year EPS guidance from $0.07 to $0.03, which was well below analysts’ EPS expectations of $0.14. On April 23, MKS projected second quarter adjusted EPS of $0.21–$0.35, which was below analysts’ consensus of $0.39 a share.

Lab Consumables/Equipment Stock Index

The Index slipped 0.1% for the month to 904.66 and is down 0.2% for the year. Most companies in the Index traded higher in April, led by Techne, which advanced 4.6%. The company jumped 8.3% on April 28 after reporting stronger-than-expected fiscal third quarter adjusted EPS.

Similarly, on April 24, Sigma-Aldrich beat adjusted first quarter EPS estimates and reaffirmed full-year EPS of $4.30–$4.40. Shares rose 1.0% for the day and were up 3.0% for the month. Cellular Dynamics International weighed on the Index, falling 20.0% for the month due to continued pressure on biotechnology companies.

On April 1, Kewaunee Scientific announced a $13 million contract with Shell for a new research laboratory in Bangalore, India, leading shares up 1.8%. Enzo Biochem climbed 2.3% on April 24 after it announced a $5.1 million settlement agreement from Affymetrix (see page 11).

Diversified Instrumentation Stock Index

The Index improved 0.4% to 211.50 for the month but is down 2.0% year to date. Illinois Tool Works led the Index for the month, gaining 4.8%. On April 22, the company raised its full-year EPS guidance by $0.15 to $4.45–$4.65, including second quarter EPS of $1.16–$1.24.

Roper Industries and Xylem advanced 4.1% and 3.2% for the month, respectively. Roper jumped 6.5% on April 28 after it beat adjusted first quarter EPS expectations and raised its full-year guidance to $6.22–$6.36 from $6.05–$6.25. The company projected second quarter EPS to be $1.46–$1.51. Xylem also beat adjusted first quarter EPS on April 29 and reaffirmed full-year EPS of $1.85–$2.00. Shares improved 3.1%. On April 30, the company was upgraded by Wedbush from “Neutral” to Outperform” and by Stifel Nicolaus from “Hold” to “Buy” with a price target of $42.

Danaher and Teledyne Technologies similarly exceeded first quarter EPS consensus but declined 2.2% and 4.6% for the month, respectively. On April 16, Danaher reaffirmed its 2014 GAAP EPS expectations of $3.60–$3.75 and projected second quarter GAAP EPS to be $0.90–$0.94. Shares slipped 1.1% the next day. On April 9, ISI upgraded the company from “Buy” to “Strong-Buy” with a price target of $86. On April 23, Teledyne missed first quarter revenue expectations but raised its GAAP EPS range from $5.06–$5.12 to $5.10–$5.14. Yet shares fell 2.3%.

International

A number of Asia Pacific equity markets were under pressure in April because of escalating tensions in Ukraine and slower manufacturing data from China. In addition, concerns over industrial output in Japan following a sales-tax increase further loomed over the markets. For the month, the Nikkei 225 fell 3.5%. All Pacific Region companies in the IBO stock table declined in value, with the exception of Techcomp, which climbed 11.1%.

On April 24, Hitachi High-Technologies reported that fiscal full-year EPS ending March 31 climbed 48% to ¥131.11 ($1.31), which was just below the company’s previous forecast. For fiscal 2014, the company projected EPS to climb 42% to ¥186.13 ($1.43). Shares fell 2.8% for the month.

European equity markets were also mixed in April. Despite the London FTSE 100 advancing 2.8% for the month, most UK-based companies in the IBO stock table declined. Horizon Discovery, which was added to the table following its IPO on March 27 (see IBO 3/31/14), recorded the largest decline in April, falling 8.2%. The provider of gene-editing technology ended the month 2.8% above its IPO price.

Porvair and Sartorius also declined for the month, falling 2.9% and 1.5%, respectively. On April 8, Porvair announced that sales climbed 26% on a currency-neutral basis for the four months ending March 31. However, 15% of the sales growth was a result of several large projects. On April 28, Sartorius reported that adjusted first quarter EPS declined 7% to €0.80 ($1.10). The company maintained its full-year revenue growth guidance of 8%–10%.

In contrast, Biotage climbed 7.8% for the month. The company climbed 2.1% on April 28 after reporting that first quarter EPS climbed threefold to SEK 0.12 ($0.02) due to double-digit sales growth. In ratings news, Abcam was upgraded by Canaccord Genuity from “Sell” to “Hold” but the price target was lowered by 3% to 375 pence ($6.22).