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Sigma-Aldrich’s fiscal second-quarter net income and sales both rose 3% as its life science products business showed the largest growth spurt in its SAFC Commercial unit.
The company’s first-half 2013 free cash flow surged 31% to $220 million. However, the company cut its full-year adjusted per-share earnings forecast due to foreign currency exchange rates.
For the fiscal second quarter ended June 30, Sigma-Aldrich said its net income rose to $119 million, or 98 cents a share, from $115 million, or 94 cents a share, a year earlier.
Second-quarter sales were $681 million, up 3% increase from $664 million a year earlier. Organic sales growth in the quarter was 4%. Changes in foreign currency exchange rates caused sales to decline by 1%.
SAFC Commercial (which includes the company’s flavors and fragrances product group) brought in $168 million in sales, 25% of overall sales for the quarter. Based on growth, the division was led by an organic sales rise in the high-single digits for its life science products. Organic sales grew 2%, although it fell short of the company’s expectations due to the challenging chemical precursor market for the LED industry served by its Hitech segment. Changes in foreign currency exchange rates had minimal impact on overall sales growth.
For full year 2013, Sigma-Aldrich expects its free cash flow to exceed $430 million. The company left its overall organic sales growth outlook unchanged, which is expected to be in the low-to-mid single digit range. However, full-year reported sales are expected to be hurt by about 2% versus a year ago.
Per share earnings, on a diluted basis, are expected to be hurt by about 10 cents a share. Due to foreign currency exchange rates, the company cut its forecast for full-year adjusted earnings on a diluted basis to a range of $4.05 to $4.15 a share, down from a prior range of $4.10 to $4.20.
In the second half of 2013, SAFC Commercial is expected to be near the low end of prior guidance of mid-to-high single digit organic sales growth due to lower expectations for Hitech electronics markets.