SigmaAldrich Corp. (SIAL) filed Quarterly Report for the period ended 2009-09-30.
Sigma-Aldrich Corporation develops manufactures and distributes the broadest range of high quality biochemicals organic chemicals chromatography products and diagnostic reagents available in the world. These products are used in high technology research and development in the life sciences at universities and in industry for the diagnosis of disease and as specialty chemicals for pharmaceutical and other manufacturing purposes. Sigmaaldrich Corp. has a market cap of $6.33 billion; its shares were traded at around $51.93 with a P/E ratio of 19 and P/S ratio of 2.8. The dividend yield of Sigmaaldrich Corp. stocks is 1.1%. Sigmaaldrich Corp. had an annual average earning growth of 12.6% over the past 10 years. GuruFocus rated Sigmaaldrich Corp. the business predictability rank of 4.5-star.
Highlight of Business Operations:
Sales decreased 1.3% for the third quarter of 2009 to $533.8 from $540.6 in the third quarter of 2008. Sales decreased 6.8% for the first nine months of 2009 to $1,575.1 from $1,690.9 in the first nine months of 2008. Organic sales, which is defined as reported sales adjusted for changes in foreign currency exchange rates, for the third quarter and first nine months of 2009 increased 2.3% and 0.6%, respectively. Changes in foreign currency exchange rates decreased reported sales in the third quarter and first nine months of 2009 by 3.6% and 7.4%, respectively, when compared to the same periods last year. Price increases in the three research business units increased sales by 2.8% and 3.4% of the Company’s total organic sales change for the third quarter and first nine months of 2009, respectively. The remainder of the sales change was primarily attributable to volume decreases of approximately 0.5% and 2.8% in the third quarter of 2009 and for the first nine months of 2009, respectively.
Research Essentials currency adjusted sales for the third quarter and first nine months of 2009 reflected a 2.5% and 4.7% increase over the same periods in 2008, respectively. Sales gains in lab essential products in the U.S. and CAPLA (Canada, Asia Pacific and Latin America), coupled with cell culture product sales gains in Europe and CAPLA were the primary drivers of growth in the quarter. Customer segments contributing to this growth were pharmaceutical and academic customers. The lab essential products in the U.S. and CAPLA, as well as modest growth in all world areas for the cell culture products, drove growth during the first nine months of 2009. Customer segments contributing to this growth were pharmaceutical and academic customers during the first nine months of 2009.
Research Specialties currency adjusted sales in the third quarter of 2009 decreased by 0.6%, while currency adjusted sales increased by 0.2% for the first nine months of 2009 as compared to the same periods in 2008. Strong growth in CAPLA was offset by declines in the U.S. and Europe. Analytical products delivered the best growth in all world areas. Decreased demand in the chemistry and lab equipment product groups outside of CAPLA put pressure on the growth achieved in analytical products. Softness in demand was noted in the worldwide commercial and industrial sectors. During the first nine months of 2009, the analytical product group was the primary driver of growth in all world areas. These gains were offset by softening in demand for chemistry products in the U.S. and Europe. Softness in demand was also noted in the U.S. and Europe in the commercial, industrial and pharmaceutical sectors offset by strong growth for the academic sector in CAPLA.
Research Biotech currency adjusted sales growth in the third quarter and the first nine months of 2009 was 5.4% and 2.2% as compared to the same periods in 2008, respectively. Sales gains in global markets in cell signaling and molecular biology products drove the organic growth in both periods. Sales growth was strongest in CAPLA with more modest growth in the U.S., which offset declines in Europe for the third quarter. The academic sector was the main driver of the growth in the quarter. The trend for the nine months reflects growth driven by cell signaling products. CAPLA and Europe growth offset declines in the U.S. Demand in the academic and nonprofit customers were the major growth contributors in the first nine months.
SAFC currency adjusted sales increased 4.8% and declined 2.8% for the third quarter and first nine months of 2009 compared to the same periods in 2008, respectively. Sales growth in Europe offset declines in the U.S. and CAPLA in the third quarter. During the quarter, the biotechnology and pharmaceutical customer segments showed improved demand. All products reflected growth in Europe during the quarter. This growth was assisted by Bioscience growth in CAPLA. Sales in all world areas showed a decline for the first nine months of 2009 as compared to 2008, although biotechnology and diagnostic customer segments reflected positive sales growth. These gains were more than offset by declines in the industrial, hospital and pharmaceutical customer segments for the first nine months of 2009.
SIAL is in the portfolios of Edward Owens of Vanguard Health Care Fund, John Hussman of Hussman Economtrics Advisors, Inc., Chris Davis of Davis Selected Advisers, Kenneth Fisher of Fisher Asset Management, LLC, Dodge & Cox.
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