For major publicly held instrument and lab product firms, calendar year third quarter organic sales advanced at a steady pace, driven by demand from biopharmaceutical markets, especially in the US, Europe and Asia. For the businesses in the Life Science and Analytical Instrument Indexes (see page 9), as well as Becton, Dickinson Biosciences, combined sales grew 2.6% excluding acquisitions, or 6.1% organically.

Currency continued to depress sales growth for US companies. For the US businesses in the Indexes, currency reduced combined revenue growth by roughly 6.5%. Aside from strength in the biopharmaceutical markets and excluding currency, growth for most instrument and lab product businesses in the Indexes was modest, as higher sales from applied markets were partially offset by weak demand from industrial markets and Japan. Several firms faced stronger year-over-year comparisons in Asia, as well as challenging business environments in certain emerging markets, such as Russia and Brazil. Bio-Rad Laboratories Life Science (LS) and Brooks Automation Life Sciences (LS) recorded weak quarterly results due to business disruptions and restructuring, respectively.

All sales figures below are organic. In the calendar year third quarter, pharmaceutical and biotechnology sales for a number of instrument and lab product companies remained strong, including double-digit growth for Agilent Technologies, Merck KGaA Life Science (Merck LS), Thermo Fisher Scientific and Waters. Agilent recorded 19% biopharmaceutical sales growth due to new products, system upgrades and aftermarket sales across a broad customer base. Waters benefited from sales to smaller specialty, generics and clinical customers in China and India. Both Merck LS and Thermo reported robust bioproduction demand. However, Thermo noted strong growth across all businesses serving the biopharmaceutical markets. Biopharmaceutical markets were also strong for PerkinElmer, Shimadzu Analytical and Measuring Instruments (AMI) and VWR. QIAGEN experienced strong pharmaceutical sales growth in all regions except Asia Pacific.

Demand from applied markets remained positive, including healthy sales of food and environmental testing products for Thermo and PerkinElmer, especially in China. Waters recorded strong double-digit food testing sales. Agilent reported a 4% increase in food sales, but flat environmental revenue due to lower instrument demand in the US. Despite lower instrument sales, QIAGEN’s Applied business grew roughly 6%. Domestic government demand for water quality products also contributed to AMI growth.

Academic and government sales were mixed. Sales for this market grew 6% for QIAGEN, remained stable for Thermo and increased for PerkinElmer outside of Japan. Waters and Bruker both recorded muted academic and government sales growth because of mixed geographic demand. Academic and government sales for Agilent declined 4% as US government spending contracted.

Industrial markets remained anemic for most companies, including Agilent’s Life Sciences and Applied Markets Group, Bruker Nano Surfaces, Thermo Analytical Technologies and Waters’s TA Division. However, PerkinElmer reported stable demand for inorganic and materials characterization products. In addition, Shimadzu AMI noted continued demand from private chemical customers and higher domestic sales to the metal industry.

Geographically, US demand was the most consistent, including double-digit revenue growth for Illumina, Shimadzu AMI and Waters. Agilent and Merck LS each posted roughly 7% growth in the US. European sales for Bruker Scientific Instruments, Merck LS and PerkinElmer each grew in the high single digits or faster.

In China, Thermo’s sales grew 15%, while Agilent and PerkinElmer each recorded high single-digit sales growth. Waters also reported robust demand, but growth was curbed by a strong comparison.

Demand in other Asian Pacific regions outside of Japan was also strong. Waters Division reported double-digit growth in India. Shimadzu AMI and Thermo recorded strong demand in India. Merck LS reported high-single digit or faster growth in India, Singapore and South Korea each. But Japan remained a headwind for most firms, except Agilent and Waters, for which sales grew in the low single digits.

Life Science Index Sales

Third quarter Life Science Index sales advanced 5.3%, 7.4% excluding currency, to $3,468 million. Excluding Illumina, Index sales grew 5.5% organically, led by demand from biopharmaceutical markets. Index growth also benefited from clinical demand for several firms, including Affymetrix and Illumina. Growth was again boosted by bioproduction sales for Thermo Life Science Solutions and Merck LS. Brooks Automation LS and Bio-Rad LS both recorded weak results due to slower demand as well as timing of orders. Adjusted operating profit was unchanged at 24.7% of sales.

Analytical Instrument Index Sales

Third quarter sales for the Analytical Instrument Index improved 0.9%, 5.2% excluding currency, to $3,639 million. Similar to the previous quarter, sales of LC and LC/MS were strong for Agilent, Thermo Analytical Technologies and Waters. Agilent also recorded significant aftermarket sales and strong service revenue. In addition, Index sales benefited from a recovery in NMR sales for Bruker. Adjusted operating margin expanded 150 basis points to 19.2% of sales, as a number of firms benefited from restructuring activity and cost control measures.

Reported IBO Index sales growths exclude acquisitions and are based on constant exchange rates for international companies when converted into US dollars.

IBO Life Science Index businesses: Affymetrix; Bio-Rad Laboratories (Life Science); Biotage; Bio-Techne (Biotechnology, Protein Platforms); Brooks Automation (Life Science Systems); Fluidigm; Illumina; Merck KGaA (Life Science); NanoString Technologies; PerkinElmer (Human Health); Tecan (Life Sciences) and Thermo Fisher Scientific (Life Science Solutions).

IBO Analytical Instrument Index businesses: Agilent Technologies (Life Sciences and Applied Markets, Agilent Crosslab); Bruker (Scientific Instruments); HORIBA (Process & Environmental Instruments & Systems, Scientific Instruments & Systems); Oxford Instruments; PerkinElmer (Environmental Health); Shimadzu (Analytical and Measuring Instruments); Spectris (Materials Analysis); Thermo Fisher Scientific (Analytical Technologies) and Waters.