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Sigma-Aldrich Q1 Earnings and Revenues Miss Estimates - Analyst Blog

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Lab chemical and life sciences company Sigma-Aldrich Corporation 's SIAL reported earnings in first-quarter 2015 came in at $1.04 per share compared with $1.05 per share a year ago.

Barring costs related to merger, earnings were $1.06 per share in the first quarter, missing the Zacks Consensus Estimate of $1.08.

Sigma-Aldrich Corporation - Earnings Surprise | FindTheCompany

Revenues and Margins

Sales for the reported quarter declined roughly 1.9% year over year to $676 million, missing the Zacks Consensus Estimate of $691 million. Organic sales gain in the quarter was 5%. Foreign exchange translation had an unfavorable impact of 8%. However, recent acquisitions had a favorable impact of 1% on sales.

Operating income rose 0.6% year over year to $175 million in the quarter. Adjusted operating income (barring restructuring and mergers related costs) for the first quarter rose 1.7% year over year to $178 million.

Segment Highlights

The Research division's sales were $335 million, down 6.7% year over year due to a 10% reduction in reported sales caused by currency exchange swings. Organically, sales rose 3%. All three business segments (Academic/Government/Hospitals, Pharma and Dealers) and all major geographies led to organic sales growth during the quarter.

Applied unit's sales rose 2.3% to $175 million. Organic sales gain was 6%. Acquisition of Cell Marque increased sales by 5%. Double-digits rise was witnessed in diagnostics and testing businesses. Changes in foreign currency rates reduced sales by 9%.

Sales from the SAFC Commercial segment were $166 million, up 4.4% year over year. Organic sales growth was 10%, and was driven by double-digit growth in the Life Sciences Services segment and mid-single digit growth in the Life Sciences Products segment. Changes in foreign currency exchange rates reduced sales by 6%.

Financial Health

Sigma-Aldrich's cash and cash equivalents were $887 million as of Mar 31, 2015, an increase of 22% year over year. Long-term debt was flat year over year at $300 million as of mar 31, 2015. Debt-to-capital ratio was 9% as of Mar 31, 2015, compared with 10% as of Mar 31, 2014.

Net cash provided by operating activities was $153 million as of Mar 31, 2015 compared with $172 million in the year ago quarter. Adjusted effective tax rate for the quarter was 28% compared with 27% in the prior year quarter.

Dividend

Sigma-Aldrich's board conditionally cleared a quarterly cash dividend of 23 cents per share, payable to shareholders of record as of Jun 1, 2015. Payment of the dividend will be made on Jun 15 so long as the acquisition of all the outstanding shares of Sigma-Aldrich by Merck KGaA has not closed prior to that date.

Developments

Sigma-Aldrich opened its state-of-the-art dry powder media manufacturing facility in Irvine, Scotland, which serves as the European counterpart to the Lenexa, Kansas, Center of Excellence for cell culture media manufacture and supply.

The company also announced the inauguration of its Asia Pacific headquarters and the latest Cell Culture Technical Center in Singapore. The center is located at Biopolis Research Park to meet customer-specific requirements in the surrounding area and provide effective technical solutions.

Sigma-Aldrich also inked an exclusive global distribution agreement with Roche that brings together its leading eCommerce and supply chain capabilities and the latter's high-quality Biochemical Reagents product portfolio. The deal will facilitate worldwide access of Roche's leading portfolio of scientific tools and reagents to the research community.

Outlook

Moving ahead, Sigma-Aldrich looks forward to join Germany-based Merck KGaA. The acquisition of Sigma-Aldrich by Merck KGaA, which is subject to specific antitrust and government approvals and other closing conditions, is expected to complete by mid-2015.

Sigma-Aldrich is a Zacks Rank #4 (Sell) stock.

Better-ranked companies in the specialty chemicals space include Chemtura Corporation CHMT , Ferro Corporation FOE and KMG Chemicals Inc. KMG . All of them sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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