Lab supply firms feel effects of consolidation

One notable example of this is Fisher Scientific​ which reported a 61 per cent drop in net earnings as it absorbs the cost of its recent acquisitive spree. However, the decline will no doubt be assuaged by a 42 per cent increase in third-quarter revenues, and a 46 per cent hike in the scientific products and services business.

The company's third-quarter revenues leaped to $1.2 billion from $890 million in the third quarter of 2003, with scientific products and services up to $923 million from $632 million a year ago.

Net earnings came in at $10.8 million, or 10 cents per share, down from $27.7 million, or 47 cents per share, a year ago. But excluding the charges from acquisitions and some debt refinancing, the company earned $79.7 million, or 75 cents per share.

The recent absorptions of Apogent, Oxoid, and Dharmacon contributed 'significantly' to the gain in revenue, said Fisher, although it did not break out sales figures by unit.

Third-quarter sales in the laboratory-workstations segment decreased to $44.5 million from $50.4 million in the prior year, which Fisher said was a result off slower demand for small projects and an increase in steel prices. It said orders were up by nearly a third at the end of a quarter year-on-year.

Meanwhile, Thermo Electron​ posted net income of $106.5 million, or 65 cents a share, more than double its figure of $48.5 million, or 29 cents a share, a year earlier.

This figures does not take into account a hit of 39 cents a share from discontinued operations including the sale of its Spectra-Physics business, as well as other one-time items, with adjusted earnings coming in at 32 cents a share, compared to 26 cents a share a year earlier.

Revenues came in at $542 million, a rise of 21 per cent year-on-year, with Thermo's life and laboratory sciences division boosted by new products - notably the Nicolet range of infrared spectrometry systems and its new Continuum series microscope - and the acquisition of data management company Innaphase, which specialises in supplying the pharmaceutical industry. Sales in this segment soared 27 per cent to $383 million, while measurement and control sales rose 9 per cent to $159 million, on what the company said was strong demand from customers in the materials industry.

Laboratory instrumentation manufacturer PerkinElmer​ reported net earnings of $24 million, or 19 cents per share, up from $14 million, or 11 cents per share, in the same period of 2003.

The company's largest segment, life and analytical sciences, saw revenue rise 4 per cent to $244 million, helped by demand in the genetic screening and environmental business but offset by a decline of about 3 per cent in revenue from drug and biotech customers.

PerkinElmer's other operations - optoelectronics and medical imaging - posted double-digit revenue growth, and total revenues for the quarter rose 10 per cent to $403 million.

Diagnostics, needle and research tool company Becton, Dickinson​ also reported a healthy, 8 per cent increase in revenues in the third quarter to $1.3 billion from $1.2 billion year over year, awhile sales at its Biosciences unit were up 7 per cent to $191 million.

The latter category, which includes BD's research tools activities, was buoyed by a 13 per cent hike in international sales to $103 million, although the US performance was flat at $89 million.

As with Fisher, however, quarterly earnings fell 58 percent after recording discontinued operations charges for its Clontech molecular biology unit, which the company is preparing to sell, of around $125 million.

BD Biosciences itself accounts for around 15 per cent of the group's total revenues, with Clontech estimated to account for a little less than 10 per cent of the division's sales.

Quarterly net earnings fell to $67 million, or 26 cents per share, from $161 million, or 61 cents last year. Excluding the charges, Becton earned $183 million, or 70 cents per share from continuing operations, up from $162 million, or 62 cents a year ago.

Bruker BioSciences​ reported a modest increase in revenues for the third quarter, driven by sales from its Bruker AXS unit. Bruker also said it will announce further cost-cutting and restructuring measures within the next two months.

Total revenues for the quarter were $66.6 million, up from $63.1 million a year ago. Sales of Bruker's AXS unit, which makes x-ray systems, increased to $32.3 million, from $26.8 million.

However, revenues from mass spectrometry division Bruker Daltonics suffered a decline to $34.2 million, from $36.3 million, which the compny blamed on late shipping and installation of some new product lines.

Bruker reported an overall net loss of $2.7 million, or 3 cents per share, a marked improvement on the prior year's $14.7 million or 17 cents. This net loss included a $1.6 million write-off of remaining investments in two proteomics companies.

In September, the company laid off around 60 employees worldwide in a move expected to save the company $6 million. Further details of the upcoming restructuring plans were not disclosed.

Instrument maker Varian​, fresh from announcing its $32 million deal to acquire UK-based Magnex Scientific, has reported net earnings up a third to $16 million in the third quarter, but trimmed its expectations for 2005 profits.

Pro-forma earnings for the quarter were $17.9 million, or 50 cents a share, compared with $15.5 million, or 44 cents a share, a year ago.

Sales for the quarter fell to $234 million at the company, which specialises in chromatography, spectroscopy and nuclear magnetic resonance instruments and consumables, compared to $239 million a year earlier.

The company cited order delays in its electronics manufacturing division as a reason for the sales drop.

Varian said sales should pick up over fiscal 2005, but pro forma earnings to would be in a range of $1.85 to $1.96 a share, below analyst forecasts of $2.

The firm also revealed that it will have restructuring and other related costs of about $1.2 million in the first quarter and $2.9 million for fiscal 2005.