Lab chemical and life sciences company Sigma-Aldrich Corporation’s SIAL reported earnings per share for second-quarter 2015 came in at 98 cents compared with $1.11 in the year-ago quarter.
Barring costs related to merger, earnings were $1.01 per share in the second quarter, missing the Zacks Consensus Estimate of $1.12.
Revenues and Margins
Sales for the reported quarter fell roughly 0.6% year over year to $697 million, beating the Zacks Consensus Estimate of $696 million. Organic sales gain in the quarter was 8%. Foreign exchange translation had an unfavorable impact of 9%. However, recent acquisitions had a favorable impact of 1% on sales.
Operating income fell 8.2% year over year to $169 million in the quarter. Adjusted operating income (excluding merger related costs) for the second quarter declined 6.5% year over year to $173 million.
Segment Highlights
The Research division’s sales were $340 million, down 5% year over year, due to an 11% reduction in reported sales resulting from currency swings. Organically, sales rose 6%. All three business segments (Academic/Government/Hospitals, Pharma and Dealers) and all major geographies supported organic sales growth during the quarter.
Applied unit’s sales rose 3% to $178 million. Organic sales gain was 8% which was offset by a 10% reduction due to foreign currency exchange rates. Acquisition of Cell Marque increased sales by 5%. Diagnostics, Testing and Industrial and all major geographies led to organic sales growth during the quarter.
Sales from the SAFC Commercial segment were $179 million, up 4% year over year. Organic sales growth was 11% but changes in foreign currency exchange rates had an unfavorable impact of 7%. Organic sales growth was driven by double-digit growth in the Life Sciences Services segment and high-single digit growth in the Life Sciences Products segment.
Financial Health
Sigma-Aldrich’s cash and cash equivalents were $1,050 million as of Jun 30, 2015, an increase of 29.6% year over year. Long-term debt was flat year over year at $300 million as of Jun 30, 2015. Debt-to-capital ratio was 8% as of Jun 30, 2015, compared with 10% as of Jun 30, 2014.
Net cash provided by operating activities was $307 million for the six month ended Jun 30, 2015 compared with $287 million in the year-ago period. Adjusted effective tax rate for the quarter was 29% compared with 28% in the prior-year quarter.
Moving ahead, Sigma-Aldrich looks forward to join Germany-based Merck KGaA. The acquisition of Sigma-Aldrich by Merck KGaA, which is subject to regulatory approvals and other closing conditions, is expected to complete by mid-2015.
Sigma-Aldrich is a Zacks Rank #3 (Hold) stock.
Better-ranked companies in the specialty chemicals space include KMG Chemicals Inc. KMG, Ferro Corp. FOE and Flexible Solutions International Inc. FSI. While KMG Chemicals sports a Zacks Rank #1 (Strong Buy), Ferro and Flexible Solutions hold a Zacks Rank #2 (Buy).
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