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Sigma-Aldrich Posts 4 Percent Q2 Sales Growth, Misses Street Expectation

NEW YORK (GenomeWeb News) – Sigma-Aldrich today reported second-quarter revenue growth of 4 percent but fell short of analysts' expectations for the top line.

The St. Louis-based research and chemical products firm reported total revenues of $664 million for the three months ended June 30, up from $637 million for the second quarter of 2011. Analysts, on average, expected sales of $674.7 million.

On an organic basis, Sigma-Aldrich's sales grew 3 percent. Acquisitions added 6 percent to sales growth, while currency exchange reduced its sales by 5 percent.

Its Research Chemicals unit reported sales of $441 million, down 3 percent from $454 million for Q2 2011, but up 1 percent on an adjusted basis. Its SAFC unit had sales of $23 million, up 22 percent from $183 million, and up 8 percent on an adjusted basis.

In a statement, Sigma-Aldrich President and CEO Rakesh Sachdev said that research sales were "at the low end of our expectation." He said sales growth in the Asia Pacific region and Latin America "remained solid and organic sales growth from academic customers remained in the low single digits. Slowdowns in the US and Europe, especially with some of our pharmaceutical customers, reduced organic sales growth in Research from first quarter 2012.

"We believe it is prudent to assume that uncertainties in the market will continue for the remainder of 2012," he added.

Sigma-Aldrich posted a profit of $115 million, or $.94 per share, compared to $113 million, or $.91 per share, for Q2 2011. Its adjusted EPS was $.97, matching Wall Street expectations.

Its R&D spending was flat year over year at $18 million, and its SG&A spending also was flat at $151 million. Its restructuring costs doubled to $4 million from $2 million.

Sigma-Aldrich finished the quarter with $572 million in cash and cash equivalents.

"Our updated 2012 adjusted EPS guidance range is $3.80 to $3.90, a $0.10 to $0.15 reduction from [the] prior guidance range of $3.90 to $4.05," said Sachdev. "This reduction is driven by more unfavorable changes in foreign currency exchange rates since our prior guidance.

"As macroeconomic conditions have impacted Research sales expectations, we have implemented additional cost controls and restructuring efforts," he added. "The cost savings from these activities are expected to offset the negative EPS impact from expected lower Research sales."

In Tuesday morning trade on the Nasdaq, shares of Sigma-Aldrich were down 2 percent at $69.02.

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