In the calendar-year second quarter, major analytical instrument and laboratory supply companies in general reported an increase in business compared to calendar-year first quarter as applied markets, Asia and consumables continued to be the main growth drivers. In addition, Europe gained some momentum as both Waters and Dionex reported a return to European sales growth, following a disappointing performance last quarter. Japan also showed signs of life, as Applied Biosystems and Dionex both highlighted sales growth in the country.

For the nine of the 10 companies whose quarterly results are profiled on pages 8–11 (Mettler-Toledo does not break out figures for its Laboratory business), calendar-year second quarter revenues in aggregate improved 14.5%. Currency benefits continued to aid the sales growth of US companies, which reported a boost in the mid to high single-digit range due to the weak dollar (see graph, page 9). Also, additional days in the quarter, compared to last year, due to the timing of the Easter holiday, helped sales for some companies, including Invitrogen and Thermo Fisher Scientific AT.

Seven of the nine profiled companies posted double-digit sales growth this quarter, spurred by new products and Asian markets. Applied Biosystems and Dionex also reported fiscal year-end results. Applied Biosystems’ fiscal 2008 sales rose 2% on an organic basis as instrument sales suffered. Sales for Dionex in fiscal 2008 rose 10% organically, led by ion chromatography sales and Asian revenues.

Operating profits for the nine companies rose 21.3% in aggregate in the quarter, led by Invitrogen and Bruker. However, operating margins for both Bruker and Varian SI were disappointing.

Demand from industrial and applied markets remained robust, with companies reporting no signs of any adverse effects due to the global economic slowdown. However, companies did note rising freight and material costs, which many indicated they have successfully passed on to customers. Industrial markets also appeared to benefit consumables sale for Applied Biosystems, Varian SI and Waters.

Growth of sales to the pharmaceutical industry was propelled by Asian markets, CROs, and biotech. However, many companies reported a soft market as Agilent posted flat organic growth for pharma and biotech sales, and Waters’ pharma sales rose 4%. However, consumables sales to the pharma market were healthy, according to Invitrogen. Thermo Fisher Scientific AT and PerkinElmer reported strong service revenue growth due in part to pharmaceutical industry sales.

Asia remained the dominant region for growth among all companies, as did other emerging markets, such as Russia and Latin America. Europe was mixed and the US sales were up in the single digits for most companies, except for Agilent, which posted 15% growth.

The summaries below are based on companies’ financial announcements, SEC filings and quarterly conference calls.

Chart: Nine Companies Q2 CY08 Total Reported Growth vs. Currency-Neutral Growth

Reported Currency-Neutral

14.5% 8.6%

Applied Biosystems FY08 Q4 and FY08

Q4 Growth % of Total FY08 Growth % of Total

DNA Sequencing 9.4% 25% 2.9% 26%

Real-Time PCR/Applied Genomics 15.2% 36% 14.0% 36%

Mass Spectrometry 4.0% 25% 2.6% 24%

Core PCR and DNA Synthesis 11.0% 9% 4.9% 9%

Other Product Lines -5.7% 5% -6.1% 5%

Bruker FY08 Q2

BioSciences % Rev. Growth % Segment Rev.

System 25.8% 73.3%

Other System 35.4% 7.8%

Aftermarket 41.9% 18.9%

BioSpin

System and Wire 41.8% 82.0%

Other System 281.6% 4.3%

Aftermarket -21.6% 13.7%

Waters FY08 Q2

Waters Div. % Rev. Growth % Segment Rev.

Instrument Systems 8.5% 54%

Chemistry Consum. 18.0% 18%

Service 17.2% 28%

TA

Instrument Systems 14.4% 75%

Service 38.1% 25%

Chart: Q2 CY08 Revenue Growth ($US)

Varian (SI) 7.3%

Applied Biosystems 9.3%

Waters 13.1%

Agilent (BAM) 13.2%

Thermo Fisher Scientific (AT) 13.7%

Invitrogen 14.3%

Dionex 14.9%

PerkinElmer (LAS) 21.7%

Bruker 30.7%

Chart: Q2 CY08 Adj. Operating Profit Growth ($US)

Varian (SI) – 16.8%

Dionex 7.8%

Waters 13.0%

Applied Biosystems 21.1%

Thermo Fisher Scientific (AT) 21.4%

Agilent (BAM) 23.2%

PerkinElmer (LAS) 25.4%

Bruker 32.2%

Invitrogen 39.5%