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Waters Corporation (WAT - Free Report) has reported first-quarter 2021 non-GAAP earnings of $2.29 per share, which surpassed the Zacks Consensus Estimate by 45.9%. Further, the bottom line improved 99% on a year-over-year basis but declined 37.3% sequentially.
Net sales of $608.5 million beat the Zacks Consensus Estimate of $522.2 million. The figure was up 31% from the year-ago quarter on a reported basis and 72% on a constant-currency basis. However, it was down 22.6% from the previous quarter.
Top-line growth was driven by strong performance in Asia, the Americas and Europe. Further, solid momentum across pharmaceutical and industrial end-markets contributed well. Additionally, the strong performance delivered by the Waters and TA segments was a positive.
Moreover, favorable foreign currency fluctuations contributed 4% to sales growth in the reported quarter.
Waters Corporation Price, Consensus and EPS Surprise
The company’s net sales figure can be categorized in four ways:
By Operating Segment: It operates in two organized segments — Waters and TA.
The Waters segment (89% of net sales) generated $541.9 million of sales, up 31% from the year-ago quarter. Sales in the TA segment were $66.7 million(11% of net sales), which reflected year-over-year growth of 31%.
By Products & Services: The division comprises three segments — Instruments, Services and Chemistry.
Instruments sales (43.2% of sales) were $263.05 million, up 49% on a year-over-year basis.
Service sales (37.2% of the sales) were $226.5 million, increasing 19% year over year.
Chemistry sales (19.6% of the sales) were $118.9million, up 22% from the year-ago quarter.
Moreover, service and chemistry segments together generated recurring revenues of $345.5 million, up 20% from the year-ago quarter.
By Markets: The company serves three end markets — Pharmaceutical, Industrial, and Governmental & Academic.
The Pharmaceutical market (59.2% of net sales) generated sales of $360.15 million, which increased 32% on a year-over-year basis.
The Industrial market’s (30.1% of sales) sales were $183.3 million, up 28% from the year-ago quarter.
Governmental & Academic (10.7% of sales) generated $65.1million of sales. The figure improved 33% year over year.
By Geography: The company’s operating regions include Asia, the Americas and Europe.
Asia (38% of net sales) generated $229.5 million of sales, up 44% on a year-over-year basis.
The Americas (32% of sales) generated $197.4 million of sales, increasing 15% year over year. Notably, sales in the United States increased 4% year over year.
Europe (30% of sales) generated $181.6 million of sales, up 36% from the prior-year quarter.
Operating Details
In the first quarter, non-GAAP selling and administrative expenses were $142.3million, reflecting an increase of 11.9% from the year-ago quarter. As a percentage of net sales, the figure contracted 400 basis points (bps) year over year.
Research and development spendingwas $38.1 million, indicating a rise of 8.9% from the year-ago reported figure. As a percentage of net sales, the figure contracted 120 bps year over year.
Adjusted operating margin was 28.6%, which expanded880 basis points (bps) year over year.
Balance Sheet & Cash Flow
As of Apr 3, 2021, cash, cash equivalents and investments were $809.8 million, higher than $443.1 million as of Dec 31, 2020.
Further, accounts receivables stood at $550.7 million at the end of the first quarter, which was down from $573.3 million at the end of the last reported quarter.
Waters generated cash from operation of $218.4 million in the reported quarter, down from $267.5 million in the prior quarter.
Further, it recorded free cash flow of $193.4 million in the firstquarter.
Guidance
For second-quarter 2021, Waters expects non-GAAP earnings of$2.15-$2.25.per share. The Zacks Consensus Estimate for earnings is pegged at $2.05.
The company anticipates net sales growth between 14% and 16% on a constant-currency basis. The Zacks Consensus Estimate for sales is currently pegged at $592.5 million.
For 2021, Waters anticipates non-GAAP earnings of$9.85-$10.05 per share. The Zacks Consensus Estimate for 2021 earnings is pegged at $9.54 per share.
Further, the company expects 2021 net sales growth of 8-11% on a constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $2.56 billion.
Long-term earnings growth rate of Agilent, Microchip and NVIDIA is pegged at 9%, 15.5% and 15.1%, respectively.
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Waters (WAT) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Waters Corporation (WAT - Free Report) has reported first-quarter 2021 non-GAAP earnings of $2.29 per share, which surpassed the Zacks Consensus Estimate by 45.9%. Further, the bottom line improved 99% on a year-over-year basis but declined 37.3% sequentially.
Net sales of $608.5 million beat the Zacks Consensus Estimate of $522.2 million. The figure was up 31% from the year-ago quarter on a reported basis and 72% on a constant-currency basis. However, it was down 22.6% from the previous quarter.
Top-line growth was driven by strong performance in Asia, the Americas and Europe. Further, solid momentum across pharmaceutical and industrial end-markets contributed well. Additionally, the strong performance delivered by the Waters and TA segments was a positive.
Moreover, favorable foreign currency fluctuations contributed 4% to sales growth in the reported quarter.
Waters Corporation Price, Consensus and EPS Surprise
Waters Corporation price-consensus-eps-surprise-chart | Waters Corporation Quote
Top Line in Detail
The company’s net sales figure can be categorized in four ways:
By Operating Segment: It operates in two organized segments — Waters and TA.
The Waters segment (89% of net sales) generated $541.9 million of sales, up 31% from the year-ago quarter. Sales in the TA segment were $66.7 million(11% of net sales), which reflected year-over-year growth of 31%.
By Products & Services: The division comprises three segments — Instruments, Services and Chemistry.
Instruments sales (43.2% of sales) were $263.05 million, up 49% on a year-over-year basis.
Service sales (37.2% of the sales) were $226.5 million, increasing 19% year over year.
Chemistry sales (19.6% of the sales) were $118.9million, up 22% from the year-ago quarter.
Moreover, service and chemistry segments together generated recurring revenues of $345.5 million, up 20% from the year-ago quarter.
By Markets: The company serves three end markets — Pharmaceutical, Industrial, and Governmental & Academic.
The Pharmaceutical market (59.2% of net sales) generated sales of $360.15 million, which increased 32% on a year-over-year basis.
The Industrial market’s (30.1% of sales) sales were $183.3 million, up 28% from the year-ago quarter.
Governmental & Academic (10.7% of sales) generated $65.1million of sales. The figure improved 33% year over year.
By Geography: The company’s operating regions include Asia, the Americas and Europe.
Asia (38% of net sales) generated $229.5 million of sales, up 44% on a year-over-year basis.
The Americas (32% of sales) generated $197.4 million of sales, increasing 15% year over year. Notably, sales in the United States increased 4% year over year.
Europe (30% of sales) generated $181.6 million of sales, up 36% from the prior-year quarter.
Operating Details
In the first quarter, non-GAAP selling and administrative expenses were $142.3million, reflecting an increase of 11.9% from the year-ago quarter. As a percentage of net sales, the figure contracted 400 basis points (bps) year over year.
Research and development spendingwas $38.1 million, indicating a rise of 8.9% from the year-ago reported figure. As a percentage of net sales, the figure contracted 120 bps year over year.
Adjusted operating margin was 28.6%, which expanded880 basis points (bps) year over year.
Balance Sheet & Cash Flow
As of Apr 3, 2021, cash, cash equivalents and investments were $809.8 million, higher than $443.1 million as of Dec 31, 2020.
Further, accounts receivables stood at $550.7 million at the end of the first quarter, which was down from $573.3 million at the end of the last reported quarter.
Waters generated cash from operation of $218.4 million in the reported quarter, down from $267.5 million in the prior quarter.
Further, it recorded free cash flow of $193.4 million in the firstquarter.
Guidance
For second-quarter 2021, Waters expects non-GAAP earnings of$2.15-$2.25.per share. The Zacks Consensus Estimate for earnings is pegged at $2.05.
The company anticipates net sales growth between 14% and 16% on a constant-currency basis. The Zacks Consensus Estimate for sales is currently pegged at $592.5 million.
For 2021, Waters anticipates non-GAAP earnings of$9.85-$10.05 per share. The Zacks Consensus Estimate for 2021 earnings is pegged at $9.54 per share.
Further, the company expects 2021 net sales growth of 8-11% on a constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $2.56 billion.
Zacks Rank & Other Stocks to Consider
Waters currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector worth consideration are Agilent Technologies (A - Free Report) , Microchip (MCHP - Free Report) and NVIDIA (NVDA - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate of Agilent, Microchip and NVIDIA is pegged at 9%, 15.5% and 15.1%, respectively.
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A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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