NEW YORK (GenomeWeb News) – Waters today reported that its first-quarter revenues rose to $427.6 million, easily beating Wall Street estimates of $404 million.
For the three months ended April 2, Waters revenues rose 16 percent from $367.7 million a year ago with foreign exchange effects adding 2 percentage points to the growth.
Instrument sales grew more than 20 percent during the quarter, led by continued rapid uptake of the Acquity H-Class UPLC and Xevo UPLC-MS system, Douglas Berthiaume, president and CEO of Waters, said during a conference call following the earnings release.
Within the Waters instruments division, US sales grew 8 percent year over year, while European sales spiked 12 percent, Waters CFO John Ornell said on the call. Outside of Japan, sales rose 29 percent while in Japan, sales declined 1 percent.
According to Berthiaume, while there have been reports of damage to the company's laboratories in Japan, so far the effects of the earthquake and tsunami there in March have been minimal, and sales during the quarter were largely in line with company expectations when the year began.
Waters' Japanese operations are centered mostly outside of the northeastern and eastern regions of the country, which were most affected, he said.
However, he also noted that Waters remains concerned about the situation in Japan, which comprises about 10 percent of the company's total sales. As the country continues to deal with the aftermath of the disaster, "a further deterioration of infrastructure in the country is a potential risk to our business that we will continue to monitor," Berthiaume said.
The company has seen no current issues with the supply chain in Japan, either. "We have completed an evaluation of all our principal vendors and one level down to our most-principal subcontractors and their supply chain and I'd say we don't see any current problems," he said.
For the first quarter, the firm's profit climbed 25 percent to $94.5 million, or $1.01 per share, from $75.5 million, or $.79 per share a year ago. On an adjusted basis, EPS was $1.04, beating analysts' estimates of $.95 per share. A year ago, non-GAAP EPS was $.81.
Its R&D spending ticked up 11 percent to $22.3 million during the quarter from $20.1 million a year ago, and SG&A spending rose to $117.1 million, up 10 percent from $106.7 million during the first quarter of 2010. Both increases were the result of constrained discretionary spending from a year ago as the company exited the recession, Ornell said.
In February, the company's board approved a two-year, $500 million share repurchase program, and during the first quarter, Waters bought back $67 million of its stock, Ornell said.
As of April 2, Waters had $1.04 billion in cash, cash equivalents, and short-term investments.
For the second quarter, Ornell forecast 15 percent growth in sales year over year, with 10 percent of that organic. On an adjusted basis, EPS is expected to come in between $1.10 and $1.15.
For full year 2011, Ornell said that Waters anticipates a 10 percent increase in sales with effects from foreign exchange adding another 2 percentage points. Non-GAAP EPS is expected to fall between $4.80 and $4.90.
In late morning trading today on the New York Stock Exchange, shares of Waters were up 9 percent to $98.88