Sigma-Aldrich Corp.’s (St. Louis) second-quarter profit inched up on a 4% jump in sales, with Asia-Pacific and Latin America the leading geographic regions for robust sales growth. Still, the company said continued uncertainties in the macroeconomic environment in the United States and Europe are likely to impact its research division for the remainder of the year.
The company which produces biochemicals, organic chemicals and inorganic chemicals, including raw flavor and fragrance materials, said its second-quarter net income rose 1.8% to $115 million, from $113 million a year earlier.
For the quarter ended June 30, net sales rose 4% to $664 million from $637 million a year ago, reflecting strong demand in its SAFC custom pharma business as well as its Hitech division, which launched a new Taiwan facility.
Asia-Pacific and Latin America were the leading geographic regions for sales growth. Slowdowns in the United States and Europe, especially with some of its pharmaceutical customers, reduced organic sales growth in research during the quarter. Biology sales were organically flat and chemistry sales declined organically mid-single digits, largely driven by weakness in pharma demand, the company said.
Sigma-Aldrich expects full-year 2012 organic sales growth in the low-to-mid single digit range."We expect to post higher organic sales growth in the second half of the year than in the first half," Rakesh Sachdev, Sigma-Aldrich CEO and president, said during a conference call.
Leading the way, SAFC sales for the second half are still projected to grow organically in the low-double digits, marked by continued growth in Bioscience and Hitech. Recent acquisitions, including BioReliance and Research Organics, are projected to increase sales by about 6%.
However, Sigma-Aldrich cited continued uncertainties in the macroeconomic environment in the United States and Europe, which are likely to impact research for the remainder of 2012. The company expects research sales to grow organically in the low-single digits in the second half of the year.
To that end, Sachdev said on the conference call that the company is focusing on driving research growth in the emerging markets and "becoming more aggressive in applied markets" such as the United States and Europe.