Waters Corp. Earnings: Higher Expenses SHRINK Margins, Profit Declines

S&P 500 (NYSE:SPY) component Waters Corporation (NYSE:WAT) reported its results for the second quarter. Waters is an analytical instrument manufacturer that designs, manufactures, sells and services liquid chromatography, ultra performance liquid chromatography, mass spectrometry instrument systems, and support products.

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Waters Corporation Earnings Cheat Sheet

Results: Net income for Waters Corporation fell to $97.7 million ($1.09 per share) vs. $100.1 million ($1.07 per share) a year earlier. This is a decline of 2.3% from the year-earlier quarter.

Revenue: Rose 0.9% to $451.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Waters Corporation fell short of the mean analyst estimate of $1.16 per share. Analysts were expecting revenue of $459.3 million.

Quoting Management: “Operational efficiency allowed us to achieve our profitability objectives in light of challenging market conditions associated with a generally weaker global economic environment,” said Douglas Berthiaume, Chairman, President and Chief Executive Officer.

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 6.2% from the year-earlier quarter.

The company has fallen short of estimates for two consecutive quarters. In the first quarter, it missed expectations by 9 cents with net income of $1 versus a mean estimate of net income of $1.09 per share.

Over the last five quarters, revenue has increased 7% on average year-over-year. The biggest increase came in the second quarter of the last fiscal year, when revenue rose 14.5% from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from $1.28 per share to $1.24, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $5.07 per share, down from $5.23 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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