Today, the Pharma division of SAFC, a member of the leading Life Science and High Technology company, Sigma-Aldrich Group (SIAL) reported results for the third quarter of 2009. Sales for the quarter were $534 million, a decline of 1.3% from the third quarter of 2008. Without reflecting an unfavorable currency impact that reduced reported sales by 3.6%, sales would have shown organic growth of 2.3%. Organic sales for the Company’s Research business grew 1.4% Organic sales for SAFC increased by 4.8% for the third quarter of 2009 as sales of H1N1 vaccine adjuvants to pharma companies and shipments of industrial media and other previously booked orders drove sales for this unit to a quarterly high for 2009.
The operating income margin in the third quarter 2009 of 22.9% of sales reflects a modest decline from levels in 2008’s third quarter and 2009’s first half resulting from unfavorable currency and a slight unfavorable product mix resulting from higher SAFC sales. The company continued to take proactive steps to accelerate benefits from its global supply chain activities and to lower SG&A costs in an effort to offset the adverse currency impact on earnings it has experienced in the first nine months of 2009.
Strong pretax profit margin and favorable tax rate raised diluted EPS by 9.4% to $0.70. Diluted EPS would have been $0.80 without a $0.10 adverse impact from currency exchange rates. Free cash flow for the third quarter of 2009 was $115 million, resulting in free cash provided in the first nine months of 2009 of $274 million.
Sales for the full year 2009 are expected to meet the company’s previously forecast organic growth in low single digits. Currency is expected to reduce otherwise reportable 2009 growth by approximately 4% if exchange rates remain near September 30, 2009 levels. Full year 2009 diluted EPS is expected to exceed $2.70. Free cash flow is expected to exceed $325 million for 2009.
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