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Waters Corp (WAT) Up 3.9% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Waters Corporation (WAT - Free Report) . Shares have added about 3.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Waters Corp. Q4 Earnings Beat on Top-Line Strength
Waters Corp. reported fourth-quarter 2016 adjusted earnings of $2.21 per share, which surpassed the Zacks Consensus Estimate of $2.12 by 4.3%.The bottom-line figure fared even better in year-over-year comparison, reflecting a striking growth of 12.8% from the prior-year quarter tally of $1.96. Remarkable, broad-based top-line expansion along with growth in Asia and Europe, aided the earnings beat.
Solid operational execution backed by the company’s efficient business model also lent strength to the results. Further, a decline in interest expenses aided quarterly profits.
For full-year 2016, adjusted earnings came in at $6.62, reflecting an increase of 12% over 2015.
Inside the Headlines
In the reported quarter, Waters Corp.’s net sales grew 7% year over year to $629 million and also came ahead of the Zacks Consensus Estimate of $617 million.
The upside in the top line came on the back of robust performance in the industrial end markets (up 14% on a constant currency basis). Further, the bio/pharmaceutical end market and the government & academic market (both up 6% on a constant currency basis) also drove the overall top-line growth.
Also, impressive contribution from sale of key products across major geographies supplemented quarterly sales growth. In addition, Water Corp.’s recurring revenues and instrument system sales grew 8% and 9%, respectively, driving top-line growth.
In terms of geographies, Waters Corp. witnessed strong sales in Asia and Europe, which posted 16% and 9% growth at constant currency. Sales in the U.S. also rose 2% year over year.
For full-year 2016, sales for the company came in at $2,167 million, up around 6% from 2015 revenues.
Total selling and administrative expenses in the quarter came in at $130.2 million, up from $128.7 million in fourth-quarter 2015. Research and development outlay for the quarter was $32.8 million, compared with $28.3 million incurred a year ago.
Despite the rise in these expenses, operating income in the quarter climbed 14.9% year over year to $208.3million.
Liquidity
Waters Corp.’s cash, cash equivalents and investments amounted to approximately $2.8 billion, higher than $2.4 billion as on Dec 31, 2015. The company’s total liabilities at quarter end increased to about $2.4 billion from $2.2 billion as on Dec 31, 2015.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been nine upward revisions for the current quarter compared to one downward.
At this time, Waters Corp.'s stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Waters Corp (WAT) Up 3.9% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Waters Corporation (WAT - Free Report) . Shares have added about 3.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Waters Corp. Q4 Earnings Beat on Top-Line Strength
Waters Corp. reported fourth-quarter 2016 adjusted earnings of $2.21 per share, which surpassed the Zacks Consensus Estimate of $2.12 by 4.3%.The bottom-line figure fared even better in year-over-year comparison, reflecting a striking growth of 12.8% from the prior-year quarter tally of $1.96. Remarkable, broad-based top-line expansion along with growth in Asia and Europe, aided the earnings beat.
Solid operational execution backed by the company’s efficient business model also lent strength to the results. Further, a decline in interest expenses aided quarterly profits.
For full-year 2016, adjusted earnings came in at $6.62, reflecting an increase of 12% over 2015.
Inside the Headlines
In the reported quarter, Waters Corp.’s net sales grew 7% year over year to $629 million and also came ahead of the Zacks Consensus Estimate of $617 million.
The upside in the top line came on the back of robust performance in the industrial end markets (up 14% on a constant currency basis). Further, the bio/pharmaceutical end market and the government & academic market (both up 6% on a constant currency basis) also drove the overall top-line growth.
Also, impressive contribution from sale of key products across major geographies supplemented quarterly sales growth. In addition, Water Corp.’s recurring revenues and instrument system sales grew 8% and 9%, respectively, driving top-line growth.
In terms of geographies, Waters Corp. witnessed strong sales in Asia and Europe, which posted 16% and 9% growth at constant currency. Sales in the U.S. also rose 2% year over year.
For full-year 2016, sales for the company came in at $2,167 million, up around 6% from 2015 revenues.
Total selling and administrative expenses in the quarter came in at $130.2 million, up from $128.7 million in fourth-quarter 2015. Research and development outlay for the quarter was $32.8 million, compared with $28.3 million incurred a year ago.
Despite the rise in these expenses, operating income in the quarter climbed 14.9% year over year to $208.3million.
Liquidity
Waters Corp.’s cash, cash equivalents and investments amounted to approximately $2.8 billion, higher than $2.4 billion as on Dec 31, 2015. The company’s total liabilities at quarter end increased to about $2.4 billion from $2.2 billion as on Dec 31, 2015.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been nine upward revisions for the current quarter compared to one downward.
Waters Corporation Price and Consensus
Waters Corporation Price and Consensus | Waters Corporation Quote
VGM Scores
At this time, Waters Corp.'s stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.