Waters Corporation ( WAT Quick Quote WAT - Free Report) has reported third-quarter 2021 non-GAAP earnings of $2.66 per share, which surpassed the Zacks Consensus Estimate by 13.7%. Further, the bottom line improved 23% on a year-over-year basis. Net sales of $659.2 million beat the Zacks Consensus Estimate of $652.3 million. The figure was up 11% from the year-ago quarter on a reported basis as well as on a constant-currency basis. Top-line growth was driven by solid momentum across pharmaceutical and industrial end markets. Strong performance in Asia, the Americas and Europe contributed well. Strong performance delivered by the Waters and TA segments was another positive. However, the company witnessed sluggishness in the governmental and academic end market. Top Line in Detail The company’s net sales figure can be categorized in four ways: By Operating Segment: It operates in two organized segments — Waters and TA. The Waters segment (88.3% of net sales) generated $581.8 million of sales, up 9% from the year-ago quarter. Sales in the TA segment were $77.4 million (11.7% of net sales), which reflected 28% year-over-year growth. By Products & Services: The division comprises three segments — Instruments, Services and Chemistry. Instruments sales (44.9% of sales) were $296.1 million, up 10% on a year-over-year basis. Service sales (36.4% of the sales) were $240.1 million, increasing 10% year over year. Chemistry sales (18.7% of the sales) were $123.04 million, up 14% from the year-ago quarter. Moreover, service and chemistry segments generated recurring revenues of $363.1 million, up 11% from the year-ago quarter. By Markets: The company serves three end markets — Pharmaceutical, Industrial, and Governmental & Academic. The Pharmaceutical market (60% of net sales) generated sales of $398.3 million, which increased 16% on a year-over-year basis. The Industrial market’s (30% of sales) sales were $196.03 million, up 9% from the year-ago quarter. Governmental & Academic (10% of sales) generated $64.9 million of sales. The figure decreased 9% year over year. By Geography: The company’s operating regions include Asia, the Americas and Europe. Asia (38.6% of net sales) generated $254.6 million of sales, up 8% on a year-over-year basis. The Americas (35% of sales) generated $231 million of sales, increasing 16% year over year. Notably, sales in the United States increased 26% year over year. Europe (26.4% of sales) generated $173.6 million of sales, up 10% from the prior-year quarter. Operating Details In the third quarter, non-GAAP selling and administrative expenses were $150.4 million, reflecting an increase of 16.9% from the year-ago quarter. As a percentage of net sales, the figure expanded 110 basis points (bps) year over year. Research and development spending was $41.9 million, indicating a rise of 20.1% from the year-ago reported figure. As a percentage of net sales, the figure expanded 50 bps year over year. The adjusted operating margin was 29.7%, which contracted 140 basis points (bps) year over year. Balance Sheet & Cash Flow As of Oct 2, 2021, cash, cash equivalents and investments were $655.2 million, lower than $663.6 million as of Jul 3, 2021. Account receivables stood at $532.9 million at the end of the third quarter, down from $543.1 million in the last reported quarter. Waters generated cash from operation of $167.9 million in the reported quarter, up from $143.04 million in the prior quarter. The company recorded a free cash flow of $140 million in the third quarter. Guidance For fourth-quarter 2021, Waters expects non-GAAP earnings of $3.40-$3.50.per share. The Zacks Consensus Estimate for earnings is pegged at $3.41. The company anticipates net sales growth of 5-7% on a constant-currency basis. The Zacks Consensus Estimate for sales is pegged at $820.2 million. For 2021, Waters anticipates non-GAAP earnings of $10.94-$11.04 per share. The Zacks Consensus Estimate for 2021 earnings is pegged at $10.65 per share. The company expects 2021 net sales growth of 15-16% on a constant-currency basis. The Zacks Consensus Estimate for sales is pegged at $2.76 billion. Zacks Rank & Stocks to Consider Waters currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector are Lam Research ( LRCX Quick Quote LRCX - Free Report) , Applied Materials ( AMAT Quick Quote AMAT - Free Report) and Trimble ( TRMB Quick Quote TRMB - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Long-term earnings growth rates for Lam Research, Applied Materials and Trimble are currently projected at 27.24%, 19.35% and 10%, respectively.