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What: After reporting disappointing second-quarter financials and reducing its full year financial forecast, Bruker Corporation (NASDAQ:BRKR) shares were losing 12% of their value at 2 p.m. EDT today.

So what: The mid-cap maker of scientific instruments used in labs reported that sales in the second quarter dropped 6.1% and that excluding the benefit of acquisitions, revenue was down 9.2% year over year to $371.7 million, or $39 million shy of industry watchers' expectations. Bruker management blamed the slip in sales on delayed funding for products at European academic institutions.

Despite the revenue drop, Bruker was able to increase its non-GAAP (generally accepted accounting principles) earnings per share via cost-cutting and as a result, EPS of $0.20 in the quarter was slightly better than the $0.19 delivered in the same quarter of 2015.  

Through the first six months of 2016, revenue is down 0.3% versus last year. Excluding acquisitions and currency exchange impacts, Bruker's organic sales were 2.2% lower than last year through the first two quarters. EPS during the first six months, however, did grow to $0.41 from $0.32 a year ago. Said Frank Laukien, the president and CEO:

In the first half of 2016, Bruker has continued to expand its gross and operating margins despite lower revenue.  We are pleased that our margin expansion, favorable tax rate and lower number of shares outstanding have resulted in 28% year-over-year non-GAAP EPS growth in the first half of 2016, and we continue to expect healthy margin expansion and EPS growth for the full year 2016.

Now what: The company's second-quarter results were poor enough to prompt management to ratchet down full-year 2016 sales growth guidance to "flat" with 2015. Previously, the company was calling for 3% growth. However, management did keep its EPS guidance unchanged at between $0.97 and $1.02. 

European weakness is a concern overall, especially since the Brexit vote has created some uncertainty regarding European research funding. If delays in Europe continue, it could create headwinds that lead to further cuts in guidance during the back half of the year. While expense reduction plans should provide profit-friendly upside when demand reignites, investors are probably best served waiting for signs of recovery before buying shares.

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