Waters Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Waters (NYSE:WAT) will unveil its latest earnings on Tuesday, October 23, 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 $1.18 per share, a rise of 3.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.24. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.18 during the last month. Analysts are projecting profit to rise by 2.3% versus last year to $4.92.

Last quarter, the company came in at net income of $1.17 per share against a mean estimate of profit of $1.16 per share, beating estimates after missing them in the previous quarter. In the first quarter, it missed forecasts by 9 cents.

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Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose $6.42 (8.5%), from $75.69 to $82.11. 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 September 5, 2012 and September 13, 2012, when shares rose for seven straight days, increasing 7% (+$5.54) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.86 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 3.12 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 11.3% to $721.7 million while assets rose 2.1% to $2.07 billion.

A Look Back: In the second quarter, profit fell 2.3% to $97.7 million ($1.09 a share) from $100.1 million ($1.07 a share) the year earlier, but exceeded analyst expectations. Revenue rose 0.9% to $451.5 million from $447.6 million.

Key Stats:

After experiencing income drops the past two quarters, the company is hoping to use this earnings announcement to rebound. Net income dropped 6.2% in the first quarter and then again in the second quarter.

On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 1.7% in the first quarter after increasing in the second 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.

Wall St. Revenue Expectations: Analysts predict a decline of 0.9% in revenue from the year-earlier quarter to $450.6 million.

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

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