Waters Corp. Earnings: Revenue Falls After Four Straight Quarters of Rising, Net Income Declines

S&P 500 (NYSE:SPY) component Waters Corporation (NYSE:WAT) reported its results for the first quarter. 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.

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Waters Earnings Cheat Sheet for the First Quarter

Results: Net income for Waters Corporation fell to $88.7 million (98 cents per share) vs. $94.5 million ($1.01 per share) a year earlier. This is a decline of 6.2% from the year-earlier quarter.

Revenue: Fell 1.7% to $420.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Waters Corporation reported adjusted net income of $1 per share. By that measure, the company fell short of mean estimate of $1.09 per share. It fell short of the average revenue estimate of $441.5 million.

Quoting Management: Commenting on the quarter, Douglas A. Berthiaume, Chairman, President, and Chief Executive Officer, said, “Weaker sales in certain developing markets and slower release of capital budgets by several larger pharmaceutical firms were key factors that contributed to our top line results. Though the first quarter did not meet our expectations, we are confident in the strength of our competitive position and in the success of our key market initiatives.”

Key Stats:

Last quarter’s profit decreases breaks a four-quarter run of profit increases. In the fourth quarter of the last fiscal year, net income rose 8.3% from the year earlier, while the figure increased 6.9% in the third quarter of the last fiscal year, 17.8% in the second quarter of the last fiscal year and 25.1% in the first quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the first quarter of the last fiscal year, which saw revenue rise 16.3%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 6 cents, and in the third quarter of the last fiscal year, it was ahead by one cent.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is $1.19 per share, down from $1.21 ninety days ago. The average estimate for the fiscal year is $5.23 per share, down from $5.30 ninety days ago.

Competitors to Watch: Bruker Corporation, Dionex Corporation, Transgenomic, Inc., Beckman Coulter, Inc., PerkinElmer, Inc., Thermo Fisher Scientific Inc., Bio-Rad Laboratories, Inc., Harvard Bioscience, Inc., Cepheid, and Mettler-Toledo Intl. Inc.

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

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