First quarter US GDP was revised from an increase of 0.2% to a contraction of 0.7%. This divergence was attributed to a greater-than-expected trade imbalance as well as lower inventory growth and consumer spending. While early estimates suggest a rebound in second quarter GDP growth in the 3% range, weak consumer spending may constrain such growth. In May, the Dow Jones Industrial Average and S&P 500 gained 1.0% each and the NASDAQ advanced 2.6%. Year to date, the Dow, S&P 500 and NASDAQ are up 1.1%, 2.4% and 7.1%, respectively.

Laboratory Instruments and Products

Cellular Dynamics was removed from the Index following the proposed acquisition by Fujifilm (see IBO 4/31/15). In May, the Index gained 3.8% to 234.88 and has advanced 5.6% for the year. Most companies traded in positive territory, led by NanoString Technologies, which jumped 17.6% for the month. The company announced on May 7 that first quarter sales climbed 32%. But EPS loss widened at a higher-than-expected rate as a result of increased headcount. The company projected an operating loss of $43–$49 million in 2015. Shares traded higher after the earnings call and advanced on May 14 after the firm reported progress in achieving Medicare coverage for its Prosigna breast cancer assay.

Illumina was the only other company in the Index to advance in double digits for the month, climbing 11.8%. The company was upgraded by Morgan Stanley on May 21 from “Equal Weight” to “Overweight.” However, the investment bank lowered its price target from $190 to $162.

Several other companies—Bio-Rad Laboratories, Luminex, Mettler-Toledo, Pacific Biosciences and VWR—recorded solid gains due to first quarter financial results. Luminex beat both first quarter adjusted EPS and revenue expectations on May 4. It maintained its 2015 revenue guidance of $230–$236 million for growth of 1%–4%. Shares improved 8.1% for the month. Bio-Rad, which climbed 7.4% for the month, crushed adjusted EPS expectations on May 5 due to strong margin improvements. On the same day, Pacific Biosciences recorded first quarter revenue growth of 52%. The firm raised its full-year revenue growth outlook from at least 20% to at least 25%. Shares climbed 9.3%. On May 1, William Blair upgraded the firm from “Market Perform” to “Outperform.”

On May 7, Mettler-Toledo posted better-than-expected first quarter adjusted EPS of $2.25. Given the uncertainty in demand for certain markets and currency headwinds, the company raised the lower end of its 2015 adjusted EPS range by only $0.05 to $12.75–$12.90. Shares climbed 2.4% in May. VWR met first quarter adjusted EPS estimates on May 14 but beat revenue expectations. It confirmed its 2015 adjusted EPS outlook of $1.42–$1.50. Shares grew 2.8% for the month.

Becton, Dickinson beat analysts’ adjusted EPS consensus on May 7 because of lower operating expenses. For fiscal 2015, the company maintained its adjusted EPS guidance of $6.50–$6.57 for its legacy business and projected adjusted EPS of $7.00–$7.10, including the acquisition of CareFusion. Shares traded marginally lower.

On May 5, QIAGEN reported adjusted EPS in line with expectations but missed revenue projections due to currency headwinds. It reaffirmed its 2015 currency-neutral adjusted EPS outlook of $1.16–$1.18. Second quarter adjusted EPS are projected to be $0.26–$0.27 excluding currency. Bruker beat adjusted first quarter EPS expectations on May 6. Conversely, sales missed analysts’ consensus on account of currency and weak NMR demand. Bruker maintained its 2015 adjusted EPS guidance of roughly $0.75. On May 21, Bruker was downgraded by Mizuho from “Buy” to “Neutral” and by William Blair from “Outperform” to “Market Perform.”

Several firms reported disappointing quarterly results. On May 7, Fluidigm slumped 28.0% after reporting weak first quarter sales results. It lowered its full-year revenue range from $142–$149 million to $133–$143 million. While adjusted EPS loss of $0.39 was just above expectations, it was significantly wider than the previous year due to increased operating expenses. Mizuho downgraded the company on May 8 from “Buy” to “Neutral” and lowered its price target from $50 to $30. Shares contracted 36.9% for the month.

Bio-Techne was impacted by currency headwinds as sales and adjusted EPS fell below expectations on May 5. Yet shares advanced 5.5% in May as the company reiterated that the weakness was mostly temporary.

On May 18, Agilent Technologies missed both fiscal second quarter adjusted EPS and revenue consensus, primarily due to currency, but also due to timing of orders and shipping challenges. Due to its new efficiency program, Agilent maintained its fiscal 2015 adjusted EPS outlook of $1.67–$1.73. Fiscal third quarter adjusted EPS are projected to be $0.38–$0.42. On May 28, Agilent approved a $1.14 billion stock repurchase program beginning November 1 or upon completion of its existing buyback plan, which has $365 million remaining. The repurchase program is based on a new capital allocation policy to return more than 85% of free cash flow to shareholders. Shares slipped 0.4% for the month.

Diversified Instrumentation Stock Index

The Index climbed 3.6% in May to 187.14 and is up 1.7% year to date. Index growth was heightened by Danaher’s pro-posed acquisition of Pall (see IBO 5/15/15). Pall ended the month up 27.9%. It posted better-than-expected revenues and adjusted EPS for the fiscal third quarter ending April 30. Adjusted EPS jumped 32% excluding currency. Danaher also advanced as shares climbed 5.4% for the month.

International

International equity markets were mixed in May. Germany’s DAX slipped 0.4%, while the UK’s FTSE 100 improved 0.3%. Japan’s Nikkei 225 climbed 5.3%.

Shares for all Pacific Region firms in the IBO Stock Table expanded, except for JEOL, which slipped 0.7%. JEOL reported on May 27 that EPS fell 61% to ¥18.58 ($0.15) for fiscal 2015 ending March 31. Precision System Science recorded the strongest gain, climbing 26.7%. On May 15, the company reported EPS of ¥9.25 ($0.08) for the fiscal third quarter, com-pared to an EPS loss of ¥14.15 ($0.14), as sales grew 57%. It narrowed its fiscal 2015 EPS loss by 26% to ¥14.25 ($0.12).

Shimadzu shares also grew by double digits in May, rising 17.3%. Fiscal 2015 EPS rose 90% to ¥62.30 ($0.50). Fiscal 2016 net income is expected grow 8.4% to ¥20.0 billion ($165 million). HORIBA reported on May 11 that first quarter EPS soared 137.8% to ¥69.79 ($0.56) and projected 2015 EPS of to grow 9.5% to ¥272.94 ($2.27). On May 11, GL Sciences report-ed that fiscal 2015 EPS fell 19% to ¥123.34 ($1.00) and announced a two-for-one stock split effective June 30. On May 14, Techcomp first quarter EPS loss widened 6% to $0.36.

UK-based companies in the IBO Stock Table were led by Scientific Digital Imaging, which jumped 66.7%. In a May 14 trading update, the firm stated that pretax profit would fall in line with expectations. Exiqon grew 19.4%. On May 7, it reported slightly lower earnings and maintained its 2015 sales guidance of DKK 150–160 million ($23–$25 million) and EBITDA of DKK 5–10 million ($0.8–$1.5 million). On May 7, Datacolor EPS fell 27% to CHF 8.77 ($9.03) for the fiscal first half ending March 31. On May 19, Merck KGaA first quarter adjusted EPS slipped 3% to €1.12 ($1.20). It maintained its moderate 2015 projected EPS of €4.60-4.80 ($5.00-$5.22).