Waters Corporation WAT is scheduled to report first-quarter 2015 results before the opening bell on Apr 28. Last quarter, the company posted a positive surprise of 5.29%. Let’s see how things are shaping up for this announcement.
Factors to Consider This Quarter
Over the past few months, Waters Corp. has been making concerted efforts to launch innovative products for improving its market share. Some of the company’s latest offerings include full spectrum molecular imaging system, NuGenesis Lab Management System and Waters ACQUITY UPC2 Trefoil Columns.
These developments reflect the company’s focus on research and development to commercialize new products. Growing popularity of research-intensive products, especially mass spectrometry solutions, is likely to act as the key driver of profitability for the first quarter.
This apart, Water Corp.’s leading position in the chromatography instrument and pharmaceuticals markets has proved to be beneficial for its growth and this trend is likely to continue, going forward. Also, robust performance of the company’s pharmaceutical business in the past few quarters is expected to supplement top-line growth significantly.
Waters Corp.’s diligent acquisition strategy is also a potential driving factor for profitability. The company’s acquisition of Rapid Evaporative Ionization Mass Spectrometry (“REIMS”) technology will likely attract high-end academic research orders, thereby allowing it to successfully diversify portfolio and reduce dependency on pharmaceutical market.
Earnings Whispers
Our proven model shows that Waters Corp. is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at 0.98%. This is a leading indicator of a likely positive earnings surprise for shares.
Zacks #3 Rank (Hold): Note that stocks with Zacks Ranks of #1 (Strong Buy), #2 (Buy) and #3 (Hold) have a significantly higher chance of beating earnings. The Sell-rated stocks (with Zacks Rank #4 and #5) should never be considered going into an earnings announcement.
The combination of Water Corp.’s Zacks Rank # 3 and positive ESP makes us confident of a positive earnings beat on Apr 28.
Other Stocks to Consider
Here are some companies which you may also consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:
Apple Inc. AAPL, Earnings ESP of +1.38% and a Zacks Rank #2.
AXIS Capital Holdings Ltd. AXS, Earnings ESP of +13.56% and a Zacks Rank #1.
American Eagle Outfitters AEO, Earnings ESP of +18.18% and a Zacks Rank #2.
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