Instrument and laboratory product sales continued to gain strength in the second quarter of calendar year 2010, according to sales results for the nine major publicly listed instrument and lab product companies discussed on pages 9–11. The quarter provided further evidence of a general recovery for instrument demand. However, most companies remained cautious due to economic uncertainty and, in some cases, concerns about European and governmental end-markets.

In aggregate, revenues in US dollars for the nine companies increased 15.0% in the calendar-year second quarter. Five companies generated double-digit sales growth. Acquisitions notably contributed to revenue growth for Agilent Life Sciences (LS) and Chemical Analysis (CA) and Dionex. Excluding Varian sales, Agilent LS and CA’s combined organic revenues increased 14%.

Operating profits for the nine companies grew 22.4% in the quarter, led by Bruker Scientific Instruments (BSI), which made gains due to efficiency initiatives. Eight of the nine companies posted double-digit operating profit growth. Companies reported increased profitability due to higher sales volumes, cost controls and new products, which have higher gross margins.

As in the first quarter, sales to applied and academic markets were the high point. Agilent LS and CA and Thermo Fisher Scientific Analytical Technologies (AT) noted good growth in the food and environmental markets. Academic demand was highlighted by Agilent LS and CA and PerkinElmer. Industrial end-markets also showed growth, particularly for BSI and PerkinElmer, but sales to such markets also benefited from weak year-over-year comparisons. Demand from big pharma remained lackluster, but Life Technologies and Waters both noted good demand from the pharmaceutical industry in general. Dionex, Life Technologies and Waters commented on softer government business, in part due to funding issues in Europe and Japan.

LC and MS had strong quarters driven by new products and sales to applied markets, according to Agilent and Waters. Life science reagent sales were robust for Life Technologies and PerkinElmer. Sequencing sales maintained their momentum for Illumina and Life Technologies. However, Illumina’s MicroArray sales declined, and Bio-Rad Laboratories Life Science (LS) reported slower growth for bioprocess-related sales.

Geographically, Asia and North America led sales. Despite austerity measures in Europe, instrument and lab product sales were unaffected for most companies. However, Bio-Rad LS, Dionex and Life Technologies noted slower sales for the region, citing restrained government funding. Japanese sales slowed for companies sequentially as the country’s supplemental budget funding ended. As has been the case for the past year, stimulus money had the greatest impact on Bruker, Illumina and Life Technologies’ sales. Companies indicated that due to the slow release of US stimulus funds, funding is now expected to increase sales next year as well.

Fiscal year-end forecasts were upbeat. Agilent, Illumina and Waters raised their fiscal-year guidance. Company summaries are based on financial reports and quarterly conference calls.

Bar Graph: Q2 CY10 Revenue Growth for Nine Companies

Q2 2010 Growth

Reported 15.0%

Exc. Acq. 9.2%

Organic 9.6%

Agilent FY10 Q3

Rev. ($M) % Total Rev. % Rev. Growth % Org. Growth

LS

Sales $374 27% 28% 15%

Orders $391 36%

CA

Sales $329 24% 62% 13%

Orders $350 71%

Bruker Scientific Instruments FY10 Q2

% Rev. Growth % Segment Rev.

Systems 21.0% 81%

Aftermarket 6.8% 19%

Bar Graph: Q2 CY10 Revenue Growth ($US)

Bio-Rad (LS) 0.7%

Waters 7.8%

Life Technologies 7.9%

Thermo Fisher Sci. (AT) 9.8%

PerkinElmer 13.6%

Dionex 13.6%

Bruker (BSI) 18.1%

Illumina 31.2%

Agilent (LS & CA) 41.7%

Life Technologies FY10 Q2

Rev. ($M) % Rev. Growth % Org. Growth

Molecular Biology Sys. $433.9 5.9% 2.0%

Genetic Systems $235.3 5.5% 6.5%

Cell Systems $230.4 13.4% 11.9%

Bar Graph: Q2 CY10 Adj. Operating Profit Growth ($US)

Bio-Rad (LS) -18.9%

Thermo Fisher Sci. (AT) 12.7%

Waters 15.4%

Life Technologies 19.3%

Dionex 21.4%

PerkinElmer 25.4%

Illumina 33.9%

Agilent (LS & CA) 37.4%

Bruker (BSI) 106.3%

Waters FY10 Q2

% Rev. Growth % Segment Rev.

Waters Div.

Instrument Systems 7% 52%

Chemistry Consum. 6% 18%

Service 4% 30%

TA Div.

Instrument Systems 28% 74%

Service 21% 26%