Waters Corporation WAT reported first-quarter 2015 adjusted non-GAAP earnings of $1.21 per share, surpassing the Zacks Consensus Estimate of $1.02 by 18.6% and the year-ago figure of 92 cents by 31.5%.
Higher operating income and net sales fueled the double-digit year-over-year growth in the quarter. Moreover, on a GAAP basis, earnings came in at $1.15 per share, higher than 82 cents in the first quarter of 2014.
Inside the Headlines
In the quarter, Waters Corp.’s net sales increased about 6.9% year over year to $460.4 million and surpassed the Zacks Consensus Estimate of $441 million. Quarterly improvement was primarily attributable to a rise in demand of the company’s broad-based products across geographies.
Gross profit for the quarter was $271.2 million, rising from $242.8 million reported in the prior-year quarter. Operating income for the quarter was $120.0 million, up from $88.8 million in the first quarter of 2014.
Total selling and administrative expenses for the quarter came in at $119.8 million, which declined from $126.6 million in the first-quarter 2015. However, Research and Development (R&D) expenses were about $29.0 million, which increased from $24.7 million incurred in the prior-year quarter.
Liquidity
Waters Corporation’s cash, cash equivalents and investments amounted to approximately $2.11 billion, higher than $2.06 billion as on Dec 31, 2014. The company’s total liabilities increased to $2.01 billion from $1.98 billion as on Dec 31, 2014.
Our Take
Keeping its winning streak alive, Waters Corp. again came with an earnings beat this season on the back improved operational performance and innovative product launches. Notably, the company has been benefitting from recovery in the pharmaceutical industry, which is its largest single market and contributes significantly to total revenue. The company has a strong presence in the chromatography instrument and pharmaceuticals markets and projects to reap enhanced profit from these markets going forward in 2015.
Waters Corp. currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering within the sector include Apple Inc. AAPL, Sony Corporation SNE and GoPro, Inc. GPRO. All the companies presently hold a Zacks Rank #2 (Buy).
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