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Waters Reduces Q3 Revenue Growth to 3 Percent; Cites Declining US Sales

NEW YORK, Oct. 14 (GenomeWeb News) - Waters today said that "slower than expected" sales growth has forced it to expect lower-than-expected third-quarter sales and earnings per diluted share.


In its second-quarter conference call July 26, Waters said it anticipated sales to grow 8 percent in the third quarter year over year. The company now expects growth to be around 3 percent year over year.


Waters generated $264.8 million in revenues during the third quarter 2004. Based on the company's renewed projections, third-quarter 2005 receipts are now expected to be around $272.7 million.


Third-quarter earnings per share, which Waters originally said would be $.47, are now projected at approximately $.43, excluding a $24-million tax provision to be recorded in the third quarter related to a dividend distribution.

Organic sales growth in the quarter was also 3 percent as foreign currency translation "had little incremental effect" on third-quarter revenue, Waters said.


Geographically, sales declined in the United States, where instrument sales to large pharmaceutical accounts were "less than expected" due to delays associated with both the evaluation of new products and the release of capital budgets, Waters said.


However, strong sales growth in Asiawere "largely in line" with expectations.


Sales of liquid-chromatography products grew "moderately" in the third quarter 2005 compared with the prior year, while mass spectrometry sales "modestly" declined. Thermal analysis instrument sales grew in the quarter at a rate that was higher than Water's overall growth rate, the company said.

Global sales to life-science companies were "roughly flat" in the quarter, while a "relatively strong" performance of Waters' industrial business was largely offset by a decline in sales to governmental and academic institutions, the company said.
"At this time, the company anticipates a continuation of the challenging business conditions experienced in the third quarter, with comparable sales growth before currency impacts, and is evaluating opportunities to control operating expenses," Waters said in a statement.


Waters will release its full third-quarter earnings on Oct. 25.

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