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Bruker's Q2 Revenues Rise 33 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Bruker today reported a 33 percent increase year over year in revenues for the second quarter with its Scientific Instruments division also growing 33 percent.

For the three months ended June 30, the company posted $401.2 million in revenues, up from $300.9 million a year ago, surpassing analysts' forecasts of $384.1 million. The firm said that on a currency-adjusted basis, revenues grew 21 percent year over year, corresponding to organic growth of 8 percent.

Bruker Scientific Instruments, which makes up the lion's share of the Bruker business, totaled $377.9 million in revenues, compared to $284.9 million a year ago. Revenues from Bruker Energy & Supercon Technologies increased to $28.1 million from $18.1 million in the second quarter of 2010.

On a conference call following the release of its earnings, Bruker President and CEO Frank Laukien said that growth was fueled by "healthy demand, particularly in our industrial, high tech, clinical, security, and applied markets."

Bruker's profit for the quarter slid 2 percent to $22.1 million, or $.13 per share, from $22.6 million, or $.14 a share, a year ago. On an adjusted basis, EPS was $.20, just short of the consensus Wall Street estimate of $.21.

The firm's R&D expenses increased to $44.3 million from $31.2 million, a 42 percent uptick. Its SG&A costs rose 52 percent to $97.5 million from $64 million a year ago.

Results for the quarter include $1.2 million in costs associated with acquired businesses, and $1.2 million in fees in connection with legal compliance examinations, Bruker said.

The year-ago figures include $1 million in charges associated with the divestiture of a manufacturing facility and $900,000 in costs incurred from acquisitions.

On the conference call Laukien said that expenses grew during the first half of the year due to the effect of currency exchange, as well as commission expenses "being due, in part, when orders are received, while our bookings have grown considerably faster than revenue in the first half of 2011."

During the first half of the year, bookings grew more than 50 percent year over year, of which more than 20 percent was organic, he said.

The company, he added, implemented a hiring moratorium during the second quarter "and we are attacking discretionary spending and expenses while at the same time trying not to restrict our rapid expansion this year."

With academic funding a pervasive theme this quarter across the entire life science tools sector, Laukien today said that academic funding and order growth has been "slower than applied, industrial, homeland security, [and] clinical markets," and has been "decent, not fantastic, but not bad," even in the US. Meanwhile, funding from universities in Europe and Asia "has been quite good for us [and] there are many other pockets of strength around the world that on balance… have given us the very strong bookings growth."

During the second half of the year, US academic funding is expected to weaken, but overall he said that Bruker "is not only optimistic about the second half of the year but really have pretty good visibility into the first half of next year in terms of revenue."

For the third quarter, Laukien said that organic revenue growth is expected in the double digits. For full-year 2011, revenue is anticipated to be in the range of $1.60 billion to $1.62 billion, surpassing the high end of the company's previously stated 2011 revenue goal of $1.57 billion.

Bruker ended the quarter with $173.1 million in cash, cash equivalents, and restricted cash.

On Tuesday, Bruker disclosed in a document filed with the US Securities and Exchange Commission that it is investigating possible bribes involving its Bruker Optics subsidiary.

"To date, the investigation has found evidence indicating that payments were made that improperly benefit employees or agents of government-owned enterprises in China," it said in its filing, adding that "no conclusions can be drawn at this time as to" the outcome of the ongoing investigation.

Bruker officials declined to comment further on the matter on today's call.

In early morning trading on Nasdaq, shares of Bruker were down about 7 percent to $15.07.

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