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Waters' Q3 Revenues Down 1 Percent on Foreign Currency Effect

NEW YORK (GenomeWeb News) – Waters today said that revenues in the third quarter dropped about 1 percent year over year as foreign currency translation tamped down sales by 3 percent.

For the three months ended Sept. 29, Waters reeled in $450.0 million in total revenue, down from $454.5 million a year ago and short of consensus Wall Street estimates of $451.1 million.

According to Chairman, President, and CEO Douglas Berthiaume, Waters saw stable pharmaceutical demand as well as strong sales in Asia allowing the company to grow organically during the quarter.

"The combination of government and university shipments grew moderately for the Waters division," he said on a conference call following the release of the earnings results. "The growth was geographically variable with Japan and Asia posting double-digit increases while North America and Europe were under pressure. In general, governmental spending was stronger than academic, and in particular we saw heavy demand for food safety applications from governmental agencies in China."

He added that the pharma business is up in the mid-single digits, but "everything else is not terribly robust."

Also, the mass spectrometry market, especially the high-end segment, "is the most challenged in this climate," he said, "[Y]ou're talking low single-digit growth and probably the hardware piece is even softer than that across the industry."

The chromatography business, Berthiaume said, is flat though "a little bit strong than the mass spec piece of the marketplace."

Waters' R&D spending was up 2 percent year over year to $23.8 million compared to $23.4 million a year ago, while its SG&A costs shrank 5 percent to $115.3 million from $121.2 million.

The Milford, Mass-based company posted a profit of $99.1 million, or $1.12 per share, during the quarter, compared to a profit of $101.3 million, or $1.10 per share, a year ago. On a non-GAAP basis, Waters had EPS of $1.18, in line with the average analyst estimate.

The company finished the third quarter with $1.45 billion in cash, cash equivalents, and short-term investments.

For full-year 2012 Waters expects to report flat revenue growth and non-GAAP EPS of between $490 and $4.95 per share.

In Tuesday morning trade on the New Stock Exchange shares of Waters were down 1 percent at $80.04.

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