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Waters' Q4 Revenues Grow 13 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Waters today reported a 13 percent jump in revenues for the fourth quarter of 2010 to $483.6 million, compared to $428.8 million a year ago, and exceeding consensus analyst estimates of $464.83.

Driving revenues for the three months ended Dec. 31, 2010, was an increase in uptake of the company's new systems, continued expansion in Asia, and an improved overall economy, Douglas Berthiaume, chairman and CEO of Waters, said in a statement.

"New technology platforms delivered the strongest sales growth, highlighted by record shipment volumes the Acquity UPLC and Xevo mass spectrometers," Berthiaume said during a conference call following the release of its earnings, and added that the Xevo TQS introduced in June had "an impressive quarterly sales performance."

Meanwhile, adoption of the Acquity UPLC H-Class drove sales of Waters' liquid chromatography, with sales particularly strong in regulated testing applications, such as pharmaceutical quality control, Berthiaume said.

"While we are very pleased with the rapid uptake of H-Class in 2010, we are further encouraged in the belief that this trend wherein UPLC is displacing HPLC technology is now firmly established and will offer a multi-year market growth opportunity," he said.

In the pharmaceutical end markets, Waters continued to see laboratories upgrading to UPLC instruments from HPLC systems and saw new business associated with biologic research and development, Berthiaume noted.

The company's largest pharma accounts grew modestly in the quarter while specialty and generic pharma customers, as well as contract research organizations and biotech business grew at a double-digit pace.

For the quarter, instrument sales in the Waters division rose 16 percent year over year, while recurring revenues increased 10 percent, Chief Financial Officer John Ornell said during the conference call.

On a geographic basis, sales in Asia grew 32 percent year-over-year. The US increased 10 percent, and Europe rose 5 percent, while Japan inched up 4 percent.

The firm's SG&A spending in the quarter rose almost 10 percent year over year to $120.5 million from $110 million, and R&D costs rose almost 16 percent to $22.9 million from $19.8 million as a result of "much improved" sales performance late in the year, which led to higher compensation expenses, Ornell said.

SG&A expenses for the fourth quarter 2010 include costs of less than $1 million associated with asset impairment related to certain Waters facilities.

For the fourth quarter, the Milford, Mass.-based firm posted a profit of $126.6 million, or $1.36 per share, a 22 percent increase over $104.1 million, or $1.08 per share, for the fourth quarter of 2009.

Analysts had expected EPS of $1.31.

For the first quarter of 2011, revenues are expected to grow between 9 and 10 percent, with between 8 and 9 percent of that organic, Ornell said.

For full-year 2010, Waters posted revenues of $1.64 billion, up about 10 percent from $1.50 billion in 2009. Analyst estimates were for $1.63 billion.

Profits for 2010 were $381.8 million, or $4.06 per share, up 18 percent from $323.3 million, or $3.34 per share, in 2009, beating analyst estimates of $4.03 per share.

The firm's SG&A spending in 2010 increased 6 percent to $445.5 million from $421.4 million a year ago. Included in the 2009 figure was a lease termination cost of $6 million. R&D costs rose to $84.3 million, a 9 percent uptick from $77.2 million.

For full-year 2011, Waters anticipates growth in the high single digits, Ornell said, as end markets stabilize and acceptance of the company's new products continue.

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