Sigma-Aldrich Beats by a Penny - Analyst Blog
08 February 2013 - 1:05AM
Zacks
Lab chemical and life sciences company Sigma-Aldrich
Corporation (SIAL) posted adjusted earnings (excluding
items) of 96 cents per share in the fourth quarter of 2012, above
the year-ago earnings of 91 cents. The results beat the Zacks
Consensus Estimate of 95 cents. Currency exchange swings reduced
adjusted earnings by 6 cents a share in the reported quarter,
Profit, as reported, rose roughly 7% year over year to $116 million
(or 96 cents per share) in the quarter from $108 million (or 89
cents per share) a year ago. Acquisitions (including BioReliance)
and gains across overseas markets aided the results.
For full-year 2012, adjusted earnings (barring restructuring and
acquisition charges) were $3.85 per share, comfortably beating the
Zacks Consensus Estimate of $3.72. Reported earnings were $3.77 per
share, up 1% from $3.72 per share posted a year ago.
Revenues and Margins
Revenues rose 7% year over year to $655 million in the quarter, yet
fell behind the Zacks Consensus Estimate of $660 million.
Acquisitions added 6% to sales while foreign exchange translation
had a negative impact of 2%. Asia Pacific, Latin America and EMEA
(Europe, Middle East and Africa) recorded mid single-digit gains
while North American sales were flat in the quarter.
Adjusted operating margin (excluding restructuring costs) for the
fourth quarter was 25.2% compared with 26.2% recorded a year ago.
For the full year, sales rose 5% year over year to $2,623 million,
essentially in line with the Zacks Consensus Estimate.
Segment Highlights
Research Chemicals revenues edged up 2% on an organic basis to $431
million in the quarter. On a reported basis, sales from the
division inched up 1%. Global sales of research products through
the company's e-commerce channels rose 6% organically in the
quarter.
The Fine Chemicals (SAFC) business sales rose 5% organically to
$224 million. On a reported basis, sales surged 17%. Booked orders
rose 2% year over year in the quarter. The division, however,
witnessed some pricing pressure (related to the new Hitech facility
in Taiwan) in the quarter.
Financial Health
Sigma-Aldrich ended 2012 with cash and cash equivalents of $724
million, a roughly 9% year over year increase. Long-term debt
remained flat year over year at $300 million. Debt to capital ratio
was 21% as of Dec 31, 2012, compared with 19% as of Dec 31, 2011.
Operating cash flow for the year jumped nearly 15% year over year
to $567 million.
The company repurchased 0.4 million shares during the fourth
quarter for $25 million. It expects to continue to buyback shares
to offset dilution associated with stock-based compensation.
Guidance
Sigma-Aldrich expects low-to-mid single digit organic sales gain in
2013. It envisions adjusted earnings per share in the band of $4.10
to $4.20 for the year. The current Zacks Consensus Estimate of
$4.18 is within this guidance range.
To better address the needs of its customers, the company, in Nov
2012, realigned its business into three market-focused units –
Research, Applied, and SAFC Commercial.
Sigma-Aldrich expects sales from its Research unit to increase in
the low single-digit clip organically in 2013. The Applied unit is
forecast to deliver mid single-digit sales gain. Revenues from the
SAFC business are expected to rise in the mid-to-high single digits
in the year.
Free cash flow forecast for the full year is more than of $430
million. Capital expenditures are expected to be roughly $130
million while operating cash flow has been projected to exceed $560
million.
Sigma-Aldrich’s BioReliance acquisition and expansion initiatives
in Asia Pacific and other high growth markets are expected to
continue to add to its growth. However, the company’s research
business is still facing economic challenges due to uncertainties
in the U.S. and Europe.
Sigma-Aldrich currently maintains a Zacks Rank #3 (Hold).
Other companies in the specialty chemical space with favorable
Zacks Rank are American Pacific Corporation
(APFC), American Vanguard Corp. (AVD) and
Penford Corporation (PENX). All of them hold a
Zacks Rank #1 (Strong Buy).
AMER PAC CORP (APFC): Free Stock Analysis Report
AMER VANGUARD (AVD): Free Stock Analysis Report
PENFORD CORP (PENX): Free Stock Analysis Report
SIGMA ALDRICH (SIAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
(MM) (NASDAQ:PENX)
Historical Stock Chart
From Jun 2024 to Jul 2024
(MM) (NASDAQ:PENX)
Historical Stock Chart
From Jul 2023 to Jul 2024
Real-Time news about (MM) (NASDAQ): 0 recent articles
More Penford Corp. (MM) News Articles