Back to top

Analyst Blog

Waters Corporation (WAT - Analyst Report) reported net income of $98.0 million or $1.14 a share in the third quarter of 2013 compared with $99.1 million or $1.12 a share in the year-earlier quarter. The reported earnings missed the Zacks Consensus Estimate of $1.22 by 2.4%.

The year-over-year growth in earnings per share was driven by increased demands in the government and academic sectors along with a lower share count in the quarter.

Excluding non-recurring items, the EPS for the quarter was $1.19 per share compared with $1.18 in the year-ago quarter.

Revenues

Total revenue in the third quarter increased 1.6% year on year to $457.3 million. However, it missed the Zacks Consensus Estimate of $463 million by 1.3%. Unfavorable currency translation impacted the top line by 2%.

Margins

Gross profit for the quarter was $265.7 million, which was down marginally by 0.5% from $267.2 million reported in the prior-year quarter. Gross margins for the quarter were down to 58.1% from 59.4% in the prior-year quarter. The decline was primarily attributable to unfavorable currency translation and the sluggish performance of the company’s pharmaceutical business despite improvement in global business conditions across the chemical industry.

Operating income for the quarter stood at $119.1 million, which declined 2.13% from $121.7 million in the third quarter of 2012. The company incurred total SG&A expense of approximately $120.6 million in the quarter, an increase of 4.5% year over year. R&D expense was around $23.6 million in the quarter versus $23.8 million in the prior-year quarter. Operating margin was down from 27.0% to 26.1% year over year.  

Balance Sheet

Exiting the quarter, cash, cash equivalents and investments reached approximately $1.7 billion compared with $1.5 billion in last year’s same quarter. Long-term debt was $1.2 billion. Debt-to-capitalization ratio was 41.7% compared with 41.6% in the prior-year quarter.   

Moving Ahead

Waters Corporation continues to see considerable stability in its end markets and a healthy acceptance of new products. However, the analytical instrument and systems market remains highly competitive.

Waters Corporation currently carries a Zacks Rank #3 (Hold). Some other favorably ranked companies from the same industry include Mettler-Toledo International Inc. (MTD - Snapshot Report), Stratasys Ltd. (SSYS - Analyst Report) and Logitech International S.A. (LOGI - Analyst Report). All three carry Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%