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Sigma-Aldrich Posts 7 Percent Q4 Revenue Growth

NEW YORK (GenomeWeb News) – Sigma-Aldrich today reported that its fourth-quarter 2012 revenues grew 7 percent, driven by strong sales for its SAFC business unit.

The St. Louis-based chemicals and research products firm reported total revenues of $655 million for the three months ended Dec. 31, compared to $610 million for the fourth quarter of 2011. It fell short of the consensus Wall Street estimate for revenues of $659.6 million. On an organic basis, the firm's revenues grew 3 percent.

Sales for its research business unit increased 1 percent, or 2 percent organically to $431 million from $425 million, and sales for the SAFC business unit were up 21 percent, or 5 percent organically to $224 million from $185 million.

Sigma-Aldrich reported net income of $116 million, or $.96 per share, for the quarter, up from $108 million, or $89 per share, for Q4 2011. It edged out analysts' consensus estimate of $.95 per share.

Its R&D spending decreased 11 percent to $16 million from $18 million, while its SG&A costs increased a fraction of 1 percent to $147 million from $146 million.

For full-year 2012, Sigma-Aldrich had revenues of $2.62 million, up 5 percent from $2.51 billion in 2011, but short of the consensus Wall Street estimate of $2.63 billion. On an organic basis, sales were up 3 percent year over year.

Revenues for its research business unit declined 1 percent to $1.77 billion from $1.78 billion, though were up 2 percent on an adjusted organic basis, the firm said. Its SAFC business unit reported sales of $855 million for the year, up 17 percent on a reported basis and 5 percent organically from $728 million in 2011.

"We saw strong growth in sales of our analytical products to research labs in 2012," Sigma-Aldrich President and CEO Rakesh Sachdev said in a statement. "Our custom manufactured products for the pharma industry grew double digits and we saw solid growth in our industrial cell culture media for production of biological drugs."

He added that the firm had "successfully offset soft demand from research customers in academia and pharma, as well as SAFC Hitech pricing headwinds" during the year.

Sigma-Aldrich posted a profit of $460 million, or $3.77 per share, for the year, compared to $457 million, or $3.72 per share, for 2011. Its adjusted EPS for 2012 was $3.85, beating analysts' expectations of $3.84

The firm's R&D spending for the year declined 4 percent to $69 million from $72 million in 2011, and its SG&A expenses increased around 1 percent to $605 million from $597 million.

Sigma-Aldrich finished the year with $724 million in cash and cash equivalents.

The firm expects to report adjusted EPS of between $4.10 and $4.20 in 2013.

"We expect to drive improved growth in 2013 through our enhanced focus on our customers and faster growing geographies enabled by our recent organizational realignment into three business units — Research, Applied, and SAFC Commercial — which should continue to gain momentum as the year progresses," Sachdev said.

"While we are cautiously optimistic about our overall business, we believe it is prudent to be prepared for another year of soft academic spending, as issues such as possible sequestration in the US remain unresolved," he added.