Waters to Enhance Shareholders' Wealth - Analyst Blog

In its efforts to share more profits with shareholders, Waters Corporation WAT revealed that its board of directors authorized the repurchase of up to $750 million of the company's common stock over a period of three years. Its prior repurchase authorization expired in May 2014.

Following the filing on May 15, shares of the company rose 1.4% to close at $103.01 on Friday. However, the momentum could not be maintained and the shares closed lower at $102.06 on May 19.

The previous share repurchase program was initiated in May 2012, when the board of directors authorized the repurchase of shares worth up to $750 million. In the two-year period, the company repurchased shares worth $529 million. Per the filing, the board of directors extended the earlier program to May 15, 2015 to allow the company to repurchase the remaining balance.

Waters Corporation, a Zacks Rank #3 (Hold) stock, reported fourth-quarter non-GAAP earnings of $1.70 a share, up 6.9% year over year from $1.59. The reported earnings also surpassed the Zacks Consensus Estimate of $1.61 by 5.6%.

Revenues for the quarter also increased a strong 8.4% year on year to $565.4 million. Revenues also comprehensively surpassed the Zacks Consensus Estimate of $534 million by almost 5.9%. Unfavorable currency translation impacted the top line by 2%.

The decision reflects the company's positive outlook for the future as it continues to see considerable stability in its end markets and a healthy acceptance of new products. In addition, fair pricing of products and its cost-control efforts are helping the company to deliver stable profitability.

Some other favorably ranked companies from the sector include Mettler-Toledo International Inc. MTD, Synaptics Inc. SYNA and PerkinElmer Inc. PKI. All three carry a Zacks Rank #2 (Buy).