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Waters Corporation (WAT - Free Report) reported fourth-quarter 2021 non-GAAP earnings of $3.67 per share, which surpassed the Zacks Consensus Estimate by 5.8%. Further, the bottom line improved 0.5% on a year-over-year basis.
Net sales of $836.45 million beat the Zacks Consensus Estimate of $820.3 million. The figure was up 6% and 8% each from the corresponding year-ago quarter’s reported figures on a reported and constant-currency basis, respectively.
Top-line growth was driven by a solid momentum across pharmaceutical, industrial, and academic and government end markets. Strong performance in Asia, the Americas and Europe contributed well. Strong performance delivered by the Waters and TA segments was another positive.
Top Line in Detail
Waters’ net sales figure can be categorized in four ways:
By Operating Segment: WAT operates in two organized segments, namely Waters and TA.
The Waters segment (88.7% of net sales) generated $742.1 million of sales, up 5% from the year-ago quarter’s figure. Sales in the TA segment were $94.4 million (11.3% of net sales), reflecting 14% year-over-year growth.
By Products & Services: The division comprises three segments, such as Instruments, Services and Chemistry.
Instruments sales (52.8% of sales) were $441.2 million, up 10% on a year-over-year basis.
Service sales (30.7% of the sales) were $256.5 million, increasing 1% year over year.
Chemistry sales (16.5% of the sales) were $138.7 million, up 5% from the year-ago quarter’s level.
Moreover, service and chemistry segments generated recurring revenues of $395.2 million, up 2% from the year-ago quarter’s level.
Waters Corporation Price, Consensus and EPS Surprise
By Markets: Waters serves three end markets, namely Pharmaceutical, Industrial, and Governmental & Academic.
The Pharmaceutical market (58.8% of net sales) generated sales of $491.9 million, which increased 7% on a year-over-year basis.
The Industrial market’s (29.6% of sales) sales were $247.3 million, up 6% from the year-ago quarter’s level.
Academic & Government (11.6% of sales) generated $97.3 million of sales. The figure increased 4% year over year.
By Geography: Waters’ operating regions include Asia, the Americas and Europe.
Asia (38.5% of net sales) generated $321.7 million of sales, up 9% on a year-over-year basis.
The Americas (32.5% of sales) generated $271.9 million of sales, increasing 8% year over year. Sales in the United States increased 8% year over year.
Europe (29% of sales) generated $242.8 million of sales, up 1% from the prior-year quarter’s level.
Operating Details
In the fourth quarter, non-GAAP selling and administrative expenses were $169.3 million, reflecting an increase of 12.2% from the year-ago quarter’s level. As a percentage of net sales, the figure expanded 100 basis points (bps) year over year.
Research and development spending was $43.3 million, up 9.2% from the year-ago reported figure. As a percentage of net sales, the figure expanded 16 bps year over year.
The adjusted operating margin was 32.6%, which contracted 240 basis points (bps) year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash, cash equivalents and investments were $569.3 million, lower than $655.2 million as of Oct 2, 2021.
Account receivables stood at $612.6 million at the end of the fourth quarter, up from $532.9 million in the last reported quarter.
Waters generated cash from operation of $217.9 million in the reported quarter, up from $167.9 million in the prior quarter.
Waters recorded a free cash flow of $187 million in the fourth quarter.
Guidance
For first-quarter 2022, Waters expects non-GAAP earnings of $2.25-$2.35 per share. The Zacks Consensus Estimate for earnings is pegged at $2.47 per share.
Waters anticipates net sales growth of 6-8% on constant-currency basis. The Zacks Consensus Estimate for sales is pegged at $629.81 million.
For 2021, Waters anticipates non-GAAP earnings of $11.75-$12.00 per share. The Zacks Consensus Estimate for 2021 earnings is pegged at $11.00 per share.
Waters expects 2021 net sales growth of 5-7% on constant-currency basis. The Zacks Consensus Estimate for sales is pegged at $2.77 billion.
Image: Bigstock
Waters (WAT) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Waters Corporation (WAT - Free Report) reported fourth-quarter 2021 non-GAAP earnings of $3.67 per share, which surpassed the Zacks Consensus Estimate by 5.8%. Further, the bottom line improved 0.5% on a year-over-year basis.
Net sales of $836.45 million beat the Zacks Consensus Estimate of $820.3 million. The figure was up 6% and 8% each from the corresponding year-ago quarter’s reported figures on a reported and constant-currency basis, respectively.
Top-line growth was driven by a solid momentum across pharmaceutical, industrial, and academic and government end markets. Strong performance in Asia, the Americas and Europe contributed well. Strong performance delivered by the Waters and TA segments was another positive.
Top Line in Detail
Waters’ net sales figure can be categorized in four ways:
By Operating Segment: WAT operates in two organized segments, namely Waters and TA.
The Waters segment (88.7% of net sales) generated $742.1 million of sales, up 5% from the year-ago quarter’s figure. Sales in the TA segment were $94.4 million (11.3% of net sales), reflecting 14% year-over-year growth.
By Products & Services: The division comprises three segments, such as Instruments, Services and Chemistry.
Instruments sales (52.8% of sales) were $441.2 million, up 10% on a year-over-year basis.
Service sales (30.7% of the sales) were $256.5 million, increasing 1% year over year.
Chemistry sales (16.5% of the sales) were $138.7 million, up 5% from the year-ago quarter’s level.
Moreover, service and chemistry segments generated recurring revenues of $395.2 million, up 2% from the year-ago quarter’s level.
Waters Corporation Price, Consensus and EPS Surprise
Waters Corporation price-consensus-eps-surprise-chart | Waters Corporation Quote
By Markets: Waters serves three end markets, namely Pharmaceutical, Industrial, and Governmental & Academic.
The Pharmaceutical market (58.8% of net sales) generated sales of $491.9 million, which increased 7% on a year-over-year basis.
The Industrial market’s (29.6% of sales) sales were $247.3 million, up 6% from the year-ago quarter’s level.
Academic & Government (11.6% of sales) generated $97.3 million of sales. The figure increased 4% year over year.
By Geography: Waters’ operating regions include Asia, the Americas and Europe.
Asia (38.5% of net sales) generated $321.7 million of sales, up 9% on a year-over-year basis.
The Americas (32.5% of sales) generated $271.9 million of sales, increasing 8% year over year. Sales in the United States increased 8% year over year.
Europe (29% of sales) generated $242.8 million of sales, up 1% from the prior-year quarter’s level.
Operating Details
In the fourth quarter, non-GAAP selling and administrative expenses were $169.3 million, reflecting an increase of 12.2% from the year-ago quarter’s level. As a percentage of net sales, the figure expanded 100 basis points (bps) year over year.
Research and development spending was $43.3 million, up 9.2% from the year-ago reported figure. As a percentage of net sales, the figure expanded 16 bps year over year.
The adjusted operating margin was 32.6%, which contracted 240 basis points (bps) year over year.
Balance Sheet & Cash Flow
As of Dec 31, 2021, cash, cash equivalents and investments were $569.3 million, lower than $655.2 million as of Oct 2, 2021.
Account receivables stood at $612.6 million at the end of the fourth quarter, up from $532.9 million in the last reported quarter.
Waters generated cash from operation of $217.9 million in the reported quarter, up from $167.9 million in the prior quarter.
Waters recorded a free cash flow of $187 million in the fourth quarter.
Guidance
For first-quarter 2022, Waters expects non-GAAP earnings of $2.25-$2.35 per share. The Zacks Consensus Estimate for earnings is pegged at $2.47 per share.
Waters anticipates net sales growth of 6-8% on constant-currency basis. The Zacks Consensus Estimate for sales is pegged at $629.81 million.
For 2021, Waters anticipates non-GAAP earnings of $11.75-$12.00 per share. The Zacks Consensus Estimate for 2021 earnings is pegged at $11.00 per share.
Waters expects 2021 net sales growth of 5-7% on constant-currency basis. The Zacks Consensus Estimate for sales is pegged at $2.77 billion.
Zacks Rank & Stocks to Consider
Waters currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Broadcom (AVGO - Free Report) , AMETEK (AME - Free Report) and Advanced Micro Devices (AMD - Free Report) . While Broadcom sports a Zacks Rank #1 (Strong Buy), AMETEK and Advanced Micro Devices carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadcom has gained 23.7% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.52%.
AMETEK has gained 17% over a year. The long-term earnings growth rate for AME is currently projected at 10.42%.
Advanced Micro Devices has gained 29.5% over a year. The long-term earnings growth rate for AMD is currently projected at 46.2%.