Testing Gear Firm Bounces Back From Plummet of 2002

By VITA REED

Orange County Business Journal

Beckman Coulter Inc., the Fullerton-based maker of testing gear for medical laboratories and researchers, has seen its stock soar this year, reversing the damage from a plunge in late 2002.

Beckman’s shares are up nearly 20 percent year to date and its market value as of last week was $3.77 billion.

Spurring the gains: continued strength in Beckman’s clinical diagnostic business, which sells products to laboratories running tests for doctors, and a turnaround at the biomedical research division.

A falloff at that unit caused a one-day 30 percent drop in share prices two years ago. Since then, Beckman has come out with a series of products designed to automate testing at hospitals and laboratories.

“Interest from Wall Street is in the new products these guys have launched over the last 12 months,” said Steve Hamill, an analyst with US Bancorp Piper Jaffray in Minneapolis. “We certainly seem to be seeing acceleration of interest among hospital labs in automation.”

With favorable exchange rates, first-quarter sales were up 16 percent from a year earlier to $537 million. Net income was up 24 percent to $35.6 million.

Beckman is set to release second-quarter results this week. Analysts expect the company to post $55 million in second-quarter net income, up about 6 percent from a year earlier.

Recognizing the need for hospitals and laboratories to cut costs, Beckman pushed return on investment as a selling point for its automation products, said Frank Pinkerton, an analyst with Banc of America Securities.

Now “adoption of automation is moving into the early majority phase, which should accelerate the sales trend over the next three years,” Pinkerton said.

Worries about Beckman’s biomedical research division seem to have faded. Sales were up 10 percent in the first quarter, to $147 million.