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Bruker Posts 5 Percent Revenue Gain for Q2, Trims Forecast

NEW YORK (GenomeWeb News) – Bruker today reported that revenues for its second quarter increased 5 percent year over year as the company missed the consensus Wall Street estimate on the top and bottom line.

For the three months ended June 30, Bruker posted revenues of $420.7 million, up from the year-ago figure of $401.2 million, but short of the average analyst estimate of $425 million.

The results are in line with preliminary results the company announced a week ago, when it said revenues were expected to be around $420 million. Bruker blamed a weaker euro, softening customer demand, particularly in Europe, and increases in spending for the softer results.

The firm also trimmed its full-year revenue and adjusted earnings-per-share forecast.

Organic revenue growth during the second quarter was up 10 percent year over year, the company said today.

By segment, Bruker Scientific Instruments posted revenues of $397 million, up 5 percent from $377.9 million a year ago. Organic revenue growth was up 10 percent compared to a year ago.

Bruker Energy & Supercon Technologies saw a nearly 8 percent decrease to $26.0 million from $28.1 million. The segment grew 3 percent organically.

Bruker's R&D costs in the quarter rose 17 percent to $51.9 million from $44.3 million a year ago, and SG&A costs were up 13 percent $110.6 million from $98.2 million.

Bruker said that net income for the quarter was $9.9 million, or $.06 per share, compared to a profit of $22.1 million, or $.13 per share, a year ago. On an adjusted basis, EPS was $.12, short of Wall Street expectations of $.16.

The firm ended the quarter with $243.6 million in cash, cash equivalents, and restricted cash.

Bruker President and CEO Frank Laukien said in a statement that the firm's backlog was "very healthy" during the quarter, but added "we are disappointed with our profitability" in the quarter, which was adversely affected by insufficient backlog conversion, gross margin pressures, and higher spending in certain businesses.

"We did see somewhat suddenly a change in demand patterns in Europe," Laukien said on a conference call this morning. He said that in Germany, in particular, business confidence plummeted in May and June.

"So a country that is fairly sizable for us as a market, on the order of 10 percent — as big as China, as big as Japan for Bruker — stepped on the brakes rather quickly it seemed in May [and] June and that we had not anticipated or been aware of until sometime in early June," he said. "It actually relaxed a little bit toward the end of June, but I hesitate to make any predictions there."

Laukien added that demand in the US has been "alright."

The firm, he said, is evaluating and improving its cost structure and taking steps to accelerate its backlog conversion.

CFO Charles Wagner said that some improvements in cost structure will be realized in 2012, but "other initiatives will require investment and time before they yield meaningful benefits."

The company changed its financial goals for the year and now is targeting revenue of between $1.70 billion and $1.75 billion and adjusted EPS of $.65 to $.70.

In February, during the firm's full-year 2011 earnings announcement, the firm said it was targeting revenues of between $1.76 billion and $1.81 billion. It also had previously said that adjusted EPS would be between $0.90 and $0.94 for the year.

In morning trading on the Nasdaq, shares of Bruker were up 3 percent to $11.90.