Lab chemical and life sciences company Sigma-Aldrich Corporation’s SIAL reported earnings per share for third-quarter 2015 came in at 94 cents compared with 90 cents earned in the year-ago quarter.
Barring costs related to merger and restructuring, earnings were $1.00 per share in the third quarter, missing the Zacks Consensus Estimate of $1.06.
Revenues and Margins
Sales for the reported quarter rose roughly 1.9% year over year to $703 million, beating the Zacks Consensus Estimate of $690 million. Organic sales gain in the quarter was 9%. Foreign exchange translation had an unfavorable impact of 8%. However, recent acquisitions had a favorable impact of 1% on sales.
Operating income rose 5.2% year over year to $162 million in the quarter. Adjusted operating income (excluding merger related and restructuring costs) for the third quarter declined 4.5% year over year to $171 million.
Segment Highlights
The Research division’s sales were $346 million, almost flat year over year. Organically, sales rose 10%. All three business segments (Academic/Government/Hospitals, Pharma and Dealers) and all major geographies supported organic sales growth during the quarter. Another strong factor to organic sales growth in all three Research segments was an exclusive distribution deal with a manufacturer of leading research tools.
Applied unit’s sales rose 4% to $177 million. Changes in foreign currency exchange rates reduced sales by 8%. Acquisition of Cell Marque increased sales by 5%. Diagnostics, Testing and Industrial along with all major geographies led to organic sales growth during the quarter.
Sales from the SAFC Commercial segment were $180 million, up 4% year over year. Organic sales growth was 10% but changes in foreign currency exchange rates had an unfavorable impact of 6%. Organic sales growth was driven by double-digit gains in both the Life Science Products segment and Life Science Services segment.
Financial Health
Sigma-Aldrich’s cash and cash equivalents were $1,175 million as of Sep 30, 2015, an increase of 32.6% year over year. Long-term debt was flat year over year at $300 million as of Sep 30, 2015.
Net cash provided by operating activities was $503 million for the nine month ended Sep 30, 2015 compared with $484 million in the year-ago period. Adjusted effective tax rate for the quarter was 29% flat compared with the prior-year quarter.
Capital expenditures for the nine months ended Sep 30, 2015 was $85 million compared to $89 million in the same period last year.
Moving ahead, Sigma-Aldrich looks forward to join Germany-based Merck KGaA. The acquisition of Sigma-Aldrich by Merck KGaA, is expected to complete by Nov 2015.
Sigma-Aldrich is a Zacks Rank #3 (Hold) stock.
Some Better-ranked companies in the specialty chemicals space include American Vanguard Corp. AVD, Chemtura Corporation CHMT and Daqo New Energy Corp. DQ. All of them hold a Zacks Rank #2 (Buy).
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