US equity markets remained unnerved in April on account of mixed earnings reports and weak economic data. First quarter US GDP growth edged higher at a listless 0.5%, representing the slowest quarterly growth rate since the beginning of 2014. Slower consumer spending, weak business investments and lower exports pressured economic growth in the quarter. However, given ongoing economic concerns and waning inflationary pressure, the Federal Reserve left rates unchanged. For the month, the Dow Jones Industrial Average and S&P 500 improved 0.5% and 0.3%, while the NASDAQ fell 1.9%. Year to date, the Dow and S&P 500 are up 2.0% and 1.0%, respectively. The NASDAQ is down 4.6%.

Laboratory Instruments and Products

The Index improved 0.1% to close at 236.96 in April but is down 3.3% for the year. Most companies ended the month in positive territory, led by Fluidigm, which jumped 18.7%. Pacific Biosciences also posted a strong gain, climbing 13.4%. The company soared 19.2% on April 22 after it reported a slightly narrower-than-expected first quarter adjusted EPS loss and orders for 30 Sequel Systems during the quarter. While the company boosted its projected 2016 gross margin range to the high 40s, operating expenses are estimated to rise due to increased noncash stock compensation expenses.

Several other companies reported earnings this month. Waters and Thermo Fisher Scientific both posted first quarter adjusted EPS ahead of analysts’ expectations due to continued strength from biopharmaceutical customers, especially in India and China. Given the strong performance, combined with lower currency headwinds and operational improvements, both companies raised company outlooks. On April 26, Waters increased its 2016 adjusted EPS range 1% to $6.20–$6.40, including second quarter adjusted EPS of $1.38–$1.48, yet shares slipped 1.3% for the month.

On April 28, Thermo Scientific boosted its 2016 adjusted EPS outlook 13% to $8.05–$8.19, but this reflects contributions from Affymetrix (see IBO 1/15/16) and increased share repurchases. Jefferies downgraded the firm from “Buy” to “Hold” on April 29. Shares grew 1.9% for the month.

Like Thermo Scientific and Waters, QIAGEN exceeded first quarter revenue expectations on April 27 due to demand from pharmaceutical customers and emerging markets. However, adjusted quarterly earnings were in line with expectations, and full-year EPS outlook was unchanged at $1.10–$1.11. At the same time, the company announced another $100 million share repurchase program. Shares improved 0.5% for the month.

Harvard Bioscience reported its delayed fourth quarter 2015 adjusted EPS on April 29, which came in just below expectations at $0.05. The company also provided preliminary first quarter sales growth of 6.0% to $27.0 million and projected full-year adjusted EPS of $0.08–$0.10. Shares contracted 1.7% for the month.

The big earnings disappointment this month came from Illumina, as it missed revenue expectations for the second consecutive quarter. On April 18, the company preannounced first quarter sales roughly 4% below consensus due to weak demand in Europe (see page 2). Illumina revised its 2016 revenue growth outlook from 16% to 12%. The following day, Cantor Fitzgerald downgraded the company from a “Buy” to “Hold” and BofA/Merrill cut its rating from “Buy” to “Neutral.” Shares slumped 16.7% for the month.

MTS Systems also contracted sharply for the month, falling 7.6%. The company plunged 12.1% on April 6 after announcing a $582 million purchase agreement of sensor technology provider PCB. While the acquisition is expected to produce revenue and cost synergies as well as expand scale, concerns remain over MTS Systems’ declining operating margins and anticipated leverage to complete the deal.

There were a number of other ratings changes this month, in particular from BofA/Merrill, which downgraded PerkinElmer and Waters on April 5 each from a “Buy” to “Neutral” rating. The investment firm also downgraded Bruker on the same day from “Neutral” to “Underperform.” Likewise, Leerink Partners downgraded Bruker on April 5 from “Outperform” to “Market Perform.” On April 6, DA Davidson downgraded FEI from “Buy” to “Neutral.”

Diversified Instrumentation

The Index slipped 0.1% to 199.06 for the month but is up 6.1% year to date. Teledyne Technologies led the Index, climbing 5.5%.

Danaher, Honeywell and Illinois Tool Works (ITW) each advanced 2.0% for the month after beating analysts’ first quarter adjusted EPS expectations and raising guidance. Danaher boosted its 2016 adjusted EPS guidance from $4.80–$4.95 to $4.85–$4.98 on April 21. The following day, Honeywell elevated the bottom range of its 2016 outlook by $0.10 to $6.55–$6.70. The company also announced a $5 billion share repurchase program on April 25. Finally, ITW lifted its full-year GAAP EPS by $0.05 on April 20 to $5.40–$5.60 due to operational improvements.

Roper Technologies similarly reported first quarter adjusted EPS ahead of expectations on April 25 but maintained its full-year EPS guidance of $6.85–$7.15. Shares declined 3.7% for the month. AMETEK and Corning also declined for the month, falling 10.8% and 3.8%, respectively, as both companies missed first quarter revenue expectations. On April 28, AMETEK reduced its 2016 adjusted EPS range by 5% to $2.42–$2.52 as a result of sustained weakness in oil and gas markets. Robert W. Baird downgraded the company on April 29 from “Outperform” to “Neutral.”

International

Asia Pacific equity markets traded mostly lower in April, led by Taiwan’s TAIEX, which fell 4.2%. China’s Shanghai Composite and Japan’s Nikkei 225 also contracted, sliding 2.2% and 0.6%, respectively. Selling pressure intensified late in the month following the Bank of Japan’s decision to keep monetary policies unchanged. Markets had anticipated additional stimulus in the face of low inflation and strengthening value of the yen.

Prices for most Pacific Rim firms in the IBO Stock Table declined, led by JEOL, which dropped 13%. Hitachi High-Technologies fell 4.7% for the month. However, on April 27, the company reported that fiscal year EPS ending March 31 climbed 16% to ¥261.68 ($2.18), which was ahead of its forecast due to improved operational performance. Despite stronger revenue growth, FY16 EPS is expected to fall 12% to ¥229.04 ($2.08).

All major European Indexes advanced in April except for Sweden’s OMX Stockholm 30, which slipped 0.4%. Germany’s DAX and the UK’s FTSE 100 improved 0.7% and 1.1%, respectively. Prices for UK and other European companies in the IBO Stock Table varied for the month, as Horizon Discovery jumped 19.4% and Tecan fell 8.8%. Horizon Discovery announced preliminary 2015 revenue growth on April 26 of 69% to £20.2 million ($31.1 million). The company’s EPS loss widened 22% to 11.2 pence ($0.17) as expected due to increased investments. Despite positive first quarter results, both Sartorius and Biotage fell for the month, falling 7.8% and 2.2%, respectively. On April 20, Sartorius reported that adjusted first quarter EPS climbed 32% to €1.70 ($1.87), driven by sales of single-use products for drug manufacturing. It maintained its full-year currency-neutral revenue growth outlook of 10%–14%. On April 28, Biotage reported that first quarter EPS climbed 21% to SEK 0.35 ($0.04) due to increased sales volume and lower production costs. The following day, it authorized a share repurchase agreement.