Back to top

Analyst Blog

Connecticut-based scientific instruments company, Waters Corp. (WAT - Analyst Report) is set to report its first-quarter fiscal 2013 results on Apr 23rd. In the last quarter it posted a 0.63% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Last quarter was a mixed one for Waters where it  surpassed the Zacks Consensus Estimate for earnings but missed the Zacks Estimate for revenues. Sales grew 1.5% and earnings per share grew 1.9% year over year in the quarter.

Earnings during the quarter benefited from the company’s initiatives to control expenses and maintain disciplined pricing. The company’s top-line figures increased organically due to a stable pharmaceutical demand and strong sales in Asia. Waters’ partnership with DANI instruments benefited the company strongly. Waters had been consistently reporting double-digit growth in monthly sales until January this year.

Earnings Whispers?

Our proven model does not conclusively show that Waters is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: This is because the Most Accurate Estimate stands at $1.08 while the Zacks Consensus Estimate is higher at $1.09. There is a difference of -0.92%.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies operating in the same sector that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

  • Synaptics Inc. (SYNA - Snapshot Report), Earnings ESP of +5.56% and a Zacks Rank #1 (Strong Buy)
  • GileadSciences Inc. (GILD - Analyst Report), Earnings ESP of +2.08% and a Zacks Rank #2 (Buy)
  • Logitech International SA (LOGI - Analyst Report), Earnings ESP of +81.82% and a Zacks Rank #3 (Hold)

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