Earnings Up at Beckman on Modest Increase in Sales : High-tech: After cutting operating costs, company had second-quarter profit of $10.7 million, up 15% from like period a year earlier.
Beckman Instruments Inc. said Monday that, after cutting back its operating costs, earnings jumped during the second quarter on only a modest increase in sales.
The maker of high-tech scientific and medical equipment reported a second-quarter profit of $10.7 million, or 37 cents a share. That was up 15% from $9.3 million, or 32 cents a share, in the same period a year earlier.
Sales for the quarter, meanwhile, rose only 2.2% to $225 million from $220 million.
For the first six months of the year, profit rose 15% to $20 million, or 69 cents a share, from $17.4 million, or 60 cents a share. But sales increased only 5.3%, to $438 million from $416 million.
Government research grants to universities and medical schools have dried up during the recession, the company said, noting that though it is selling about the same amount of scientific equipment as last year that wasn’t a very strong period, either.
Among the equipment Beckman makes are sophisticated centrifuges used to separate substances so that scientists can study them and devices called spectrophotometers that can determine what something is made of by how much light it absorbs. Beckman’s centrifuges whirl at speeds as high as 120,000 revolutions per minute and undergo more stress than a jet engine.
In the market for medical equipment used to diagnose diseases, Beckman had strong second-quarter sales of a blood-analyzing device called the Synchron CX7 that it introduced last year. The machine can run a variety of tests on as many as 825 blood samples an hour, far more than Beckman’s other machines.
The Fullerton company also leased more of those machines during the second quarter. That means hospitals bought more of Beckman’s testing materials used with the machines. That is important because about 80% of Beckman’s sales are of such testing materials, what is known as an “aftermarket.”
The company said it expects the grants crunch to continue through at least the rest of this year. Meanwhile, the company said, while it has reduced operating costs, it will not skimp on money for research and development.
“Beckman has successfully implemented programs to improve operating results,” Chairman Louis Rosso said in a statement Monday, “while at the same time maintaining our investment in research and development.”
The company said it shaved costs by introducing programs such as just-in-time inventory, where raw materials are ordered as needed and don’t pile up at plants. Beckman also closed a plant in Northern California last year but says it has not had a major layoff. It now has 6,900 employees at 35 plants and offices around the world.
