We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Waters (WAT) Q2 Earnings & Sales Beat Estimates, Fall Y/Y
Read MoreHide Full Article
Waters Corporation (WAT - Free Report) reported second-quarter 2024 non-GAAP earnings of $2.63 per share, beating the Zacks Consensus Estimate by 3.1%. However, the bottom line decreased 6.1% on a year-over-year basis.
Net sales of $708.53 million topped the Zacks Consensus Estimate of $698 million. The figure fell 4% both on a reported basis and constant currency basis from the year-ago quarter’s readings.
Softness in the pharmaceutical, industrial, and government and academic markets was a major concern. The weakening momentum in Asia, the Americas and Europe was another headwind.
Sluggishness in the Waters and TA segments was a negative.
Nevertheless, the growing momentum in Services and Chemistry sales was positive.
Waters Corporation Price, Consensus and EPS Surprise
Waters’ net sales figure can be categorized in four ways:
Operating Segment: WAT operates under two organized segments, namely, Waters and TA.
The Waters segment (88% of net sales) generated sales worth $622.56 million, down 5% year over year. Sales in the TA segment were $85.97 million (12%), reflecting a 2% year-over-year decline.
Products & Services: The division comprises three segments, namely, Instruments, Services and Chemistry.
Instruments sales (41%) were $294.06 million, declining 14% on a year-over-year basis.
Services registered sales (39%) worth $273.4 million, climbing 4% year over year.
Chemistry sales (20%) totaled $141.1 million, growing 4% year over year.
Moreover, the Services and Chemistry segments jointly generated recurring revenues of $414.5 million, up 4% year over year.
Markets: Waters serves three end markets such as Pharmaceutical, Industrial, and Governmental & Academic.
The Pharmaceutical market (58%) generated sales of $415.75 million, which decreased 3% on a year-over-year basis.
The Industrial market’s (32%) sales were $221.39 million, down 4% year over year.
The Governmental & Academic market (10%) generated $71.4 million in sales, which plunged 15% year over year.
Geography: Waters’ operating regions include Asia, the Americas and Europe.
Asia (34%) generated $237.43 million in sales, down 7% on a year-over-year basis.
Sales in the Americas (38%) generated $274.47 million, decreasing 3% year over year.
Europe (28%) generated $196.63 million in sales, down 3% year over year.
Operating Details
In the second quarter, non-GAAP selling and administrative expenses were $168.3 million, down 4% year over year. As a percentage of net sales, the figure expanded 10 basis points (bps) on a year-over-year basis.
Research and development spending of $44.9 million decreased 0.2% year over year. As a percentage of net sales, the figure expanded 20 bps year over year.
The adjusted operating margin was 29.2%, which contracted 40 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash, cash equivalents and investments were $327.4 million, down from $338.2 million as of Mar 31, 2024.
Waters generated cash from operations of $54.5 million in the reported quarter, down from $262.9 million in the prior quarter.
WAT recorded a free cash flow of $143.5 million in the second quarter.
Guidance
For third-quarter 2024, Waters expects non-GAAP earnings of $2.60-$2.70 per share. The Zacks Consensus Estimate is pegged at $2.89.
Management anticipates organic sales to grow 1-3% on a constant-currency basis. WAT projects sales growth to dip 1.5% due to unfavorable foreign exchange fluctuations.
On a reported basis, total sales growth is predicted to be in the range of (0.5)-1.5%. The Zacks Consensus Estimate is pegged at $739.43 million.
For 2024, Waters anticipates non-GAAP earnings of $11.55-$11.65 per share. The Zacks Consensus Estimate is pegged at $11.83.
Waters projects 2024 organic sales to decline 2-0.5% on a constant-currency basis. The Wyatt transaction is expected to increase sales growth by 1.3%. WAT projects sales growth to be affected by 1.5% due to unfavorable foreign exchange fluctuations.
On a reported basis, total sales are suggested to decline 2.2-0.7%. The Zacks Consensus Estimate is pegged at $2.96 billion.
Image: Bigstock
Waters (WAT) Q2 Earnings & Sales Beat Estimates, Fall Y/Y
Waters Corporation (WAT - Free Report) reported second-quarter 2024 non-GAAP earnings of $2.63 per share, beating the Zacks Consensus Estimate by 3.1%. However, the bottom line decreased 6.1% on a year-over-year basis.
Net sales of $708.53 million topped the Zacks Consensus Estimate of $698 million. The figure fell 4% both on a reported basis and constant currency basis from the year-ago quarter’s readings.
Softness in the pharmaceutical, industrial, and government and academic markets was a major concern. The weakening momentum in Asia, the Americas and Europe was another headwind.
Sluggishness in the Waters and TA segments was a negative.
Nevertheless, the growing momentum in Services and Chemistry sales was positive.
Waters Corporation Price, Consensus and EPS Surprise
Waters Corporation price-consensus-eps-surprise-chart | Waters Corporation Quote
Top Line in Detail
Waters’ net sales figure can be categorized in four ways:
Operating Segment: WAT operates under two organized segments, namely, Waters and TA.
The Waters segment (88% of net sales) generated sales worth $622.56 million, down 5% year over year. Sales in the TA segment were $85.97 million (12%), reflecting a 2% year-over-year decline.
Products & Services: The division comprises three segments, namely, Instruments, Services and Chemistry.
Instruments sales (41%) were $294.06 million, declining 14% on a year-over-year basis.
Services registered sales (39%) worth $273.4 million, climbing 4% year over year.
Chemistry sales (20%) totaled $141.1 million, growing 4% year over year.
Moreover, the Services and Chemistry segments jointly generated recurring revenues of $414.5 million, up 4% year over year.
Markets: Waters serves three end markets such as Pharmaceutical, Industrial, and Governmental & Academic.
The Pharmaceutical market (58%) generated sales of $415.75 million, which decreased 3% on a year-over-year basis.
The Industrial market’s (32%) sales were $221.39 million, down 4% year over year.
The Governmental & Academic market (10%) generated $71.4 million in sales, which plunged 15% year over year.
Geography: Waters’ operating regions include Asia, the Americas and Europe.
Asia (34%) generated $237.43 million in sales, down 7% on a year-over-year basis.
Sales in the Americas (38%) generated $274.47 million, decreasing 3% year over year.
Europe (28%) generated $196.63 million in sales, down 3% year over year.
Operating Details
In the second quarter, non-GAAP selling and administrative expenses were $168.3 million, down 4% year over year. As a percentage of net sales, the figure expanded 10 basis points (bps) on a year-over-year basis.
Research and development spending of $44.9 million decreased 0.2% year over year. As a percentage of net sales, the figure expanded 20 bps year over year.
The adjusted operating margin was 29.2%, which contracted 40 bps year over year.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash, cash equivalents and investments were $327.4 million, down from $338.2 million as of Mar 31, 2024.
Waters generated cash from operations of $54.5 million in the reported quarter, down from $262.9 million in the prior quarter.
WAT recorded a free cash flow of $143.5 million in the second quarter.
Guidance
For third-quarter 2024, Waters expects non-GAAP earnings of $2.60-$2.70 per share. The Zacks Consensus Estimate is pegged at $2.89.
Management anticipates organic sales to grow 1-3% on a constant-currency basis. WAT projects sales growth to dip 1.5% due to unfavorable foreign exchange fluctuations.
On a reported basis, total sales growth is predicted to be in the range of (0.5)-1.5%. The Zacks Consensus Estimate is pegged at $739.43 million.
For 2024, Waters anticipates non-GAAP earnings of $11.55-$11.65 per share. The Zacks Consensus Estimate is pegged at $11.83.
Waters projects 2024 organic sales to decline 2-0.5% on a constant-currency basis. The Wyatt transaction is expected to increase sales growth by 1.3%. WAT projects sales growth to be affected by 1.5% due to unfavorable foreign exchange fluctuations.
On a reported basis, total sales are suggested to decline 2.2-0.7%. The Zacks Consensus Estimate is pegged at $2.96 billion.
Zacks Rank & Stocks to Consider
Currently, Waters carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical market sector are Amedisys (AMED - Free Report) , Abbott Laboratories (ABT - Free Report) , and Akero Therapeutics (AKRO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amedisys shares have gained 3.1% in the year-to-date period. AMED’s long-term earnings growth rate is currently projected at 9.45%.
Abbott Laboratories shares have lost 2.9% in the year-to-date period. ABT’s long-term earnings growth rate is currently projected at 8.62%.
Akero Therapeutics shares have gained 14% in the year-to-date period. The long-term earnings growth rate for AKRO is currently projected at 8.63%.