Waters Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Waters (NYSE:WAT) will unveil its latest earnings on Tuesday, July 24, 2012. Waters is an analytical instrument manufacturer that designs, manufactures, sells and services liquid chromatography, ultra performance liquid chromatography, mass spectrometry instrument systems, and support products.

Waters Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.16 per share, a rise of 7.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.19. Between one and three months ago, the average estimate moved down. It also has dropped from $1.17 during the last month. For the year, analysts are projecting net income of $5.07 per share, a rise of 5.4% from last year.

Past Earnings Performance: Last quarter, the company missed estimates by 9 cents, coming in at profit of $1 per share versus a mean estimate of net income of $1.09 per share. In the fourth quarter of the last fiscal year, the company beat estimates by 6 cents.

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Stock Price Performance: Between April 23, 2012 and July 18, 2012, the stock price fell $9.71 (-11%), from $88.34 to $78.63. It saw one of its worst periods between December 6, 2011 and December 14, 2011 when shares fell for seven straight days, dropping 10.4% (-$8.33) over that span. The stock price saw one of its best stretches over the last year between June 11, 2012 and June 19, 2012, when shares rose for seven straight days, increasing 5.3% (+$4.12) over that span.

A Look Back: In the first quarter, profit fell 6.2% to $88.7 million (98 cents a share) from $94.5 million ($1.01 a share) the year earlier, missing analyst expectations. Revenue fell 1.7% to $420.5 million from $427.6 million.

Wall St. Revenue Expectations: Analysts are projecting a rise of 2.7% in revenue from the year-earlier quarter to $459.6 million.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 14.5% in the second quarter of the last fiscal year, 13.3% in the third quarter of the last fiscal year and 7.8%in the fourth quarter of the last fiscal year before dropping in the first quarter.

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 17.8% in the second quarter of the last fiscal year, 6.9% in the third quarter of the last fiscal year and 8.3% in the fourth quarter of the last fiscal year before declining in the first quarter.

Analyst Ratings: With 11 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.12 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.23 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 7.7% to $648.3 million while assets rose 4.2% to $2.02 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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