Market Overview

Waters Corporation (WAT) Q2 Earnings Beat, Revenues Increase


Waters Corporation (NYSE: WAT) reported second-quarter 2014 non-GAAP earnings of $1.22 per share, beating the Zacks Consensus Estimate by a penny. The adjusted earnings per share reflected a 13.0% year-over-year increase from $1.08 in the prior-year quarter.

The company reported GAAP net income of $96.5 million or $1.13 per share versus $89.3 million or $1.03 a share in the second quarter of 2013.

Waters Corporation benefited from a strong product demand in key regions like the U.S., especially in the pharmaceutical sector, leading to robust organic growth. This apart, a solid balance sheet and healthy cash generation were the other positives.


Waters Corporation's revenues came in at $481.8 million compared with $451.1 in the prior-year quarter. Revenues surpassed the Zacks Consensus Estimate of $475 million by 1.4%. The company's sales witnessed a gain of 1% on the back of favorable currency translations in the quarter.


Gross profit for the quarter was $279.9 million, rising 6.5% from $262.8 million reported in the prior-year quarter. However, gross margin for the quarter was marginally down to 58.1% from 58.3% in the year-ago quarter.

Operating income for the quarter was $118.4 million, increasing 5.1% from $112.7 million in the second quarter of 2013. The company incurred total selling and administrative expenses of approximately $131.9 million in the quarter, an increase of almost 7.1% year over year. Research and Development (R&D) expense was about $27.0 million in the quarter versus $24.7 million in the prior-year quarter. Operating margin stood at 24.6% compared with 25.0% in the second-quarter 2013.  

Balance Sheet

Exiting the year, cash, cash equivalents and investments reached approximately $1.92 billion compared with $1.80 billion as on Dec 31, 2013. The company's long-term debt declined to $1.16 billion from $1.19 billion at year-end 2013. However, its total liabilities increased to $1.88 billion compared with $1.82 billion as on Dec 31, 2013.

Moving Ahead

Waters Corporation is likely to benefit from the recovery in the pharmaceutical industry, which is its largest single market, contributing a significant share to total revenue. 

Waters Corporation currently has a Zacks Rank #4 (Sell). Some better-ranked companies that can be considered at present include Bruker Corporation (NASDAQ: BRKR), Synaptics Inc. (NASDAQ: SYNA) and Noble Group Limited (NOBGY). All three carry a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
WATERS CORP (NYSE: WAT): Free Stock Analysis Report
BRUKER CORP (NASDAQ: BRKR): Free Stock Analysis Report
SYNAPTICS INC (NASDAQ: SYNA): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Earnings News


Related Articles (BRKR + SYNA)

View Comments and Join the Discussion!