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Waters Revenues up 10 Percent in Q4, Down 2 Percent in 2020

NEW YORK – Waters on Tuesday reported that its fourth quarter revenues were up 10 percent compared to the year-ago period, while full-year revenues declined 2 percent.

For the three months ended Dec. 31, 2020, Waters' revenues were $786.7 million, up 10 percent from $716.3 million in Q4 2019, and above the consensus Wall Street estimate of $713.7 million.

The effect of foreign currency translation increased Q4 revenues by 3 percent, the company said.

On a conference call following the earnings release, Waters President and CEO Udit Batra said that the company's Q4 performance was driven by improvements in the pharmaceutical market and increased capital spending in the second half of the year.

Pharma sales were up 15 percent (in constant currency) in the quarter and up 1 percent in full year 2020. Government and academic sales were down 15 percent in Q4 and down 16 percent in 2020. Sales to industrial markets were up 5 percent in the quarter and down 3 percent in 2020.

Instrument platform sales were up 4 percent in Q4 and down 9 percent in full year 2020. Batra said that mass spec sales were essentially flat in Q4, though he noted that mass spec sales to pharma customers grew in the double digits with sales of Waters' BioAccord and QDa platforms growing at a double-digit rate.

He added that the company expected to see an acceleration in BioAccord orders once it got applications for the instrument on an enterprise software platform.

Batra said Waters had seen strong sales of its Xevo tandem quadrupole instruments, as well.

Sales of the company's liquid chromatography instruments grew in the high single digits, Batra said, noting that this was the first quarterly LC instrument growth Waters had posted in two years.

He highlighted the launch planned for this month of the company's Acquity Premier UPLC system that he said targets the small and large molecule discovery and development space.

Waters' recurring revenues grew by 11 percent in Q4 and 3 percent in 2020. Batra said the company had seen strong sales in Q1 2021 of its recently launched Premier LC columns.

For Q4, Waters posted a net income of $218.3 million, or $3.49 per share, compared to a net income of $200.7 million, or $3.12 per share, in Q4 2019. On an adjusted basis, the company reported EPS of $3.65, up from $3.20 in Q4 of 2019, and beating the consensus Wall Street estimate of $2.89.

R&D spending in the quarter was up 7 percent year over year to $39.7 million from $37.1 million, while SG&A rose 8 percent to $153.1 million from $141.2 million.

Revenues for full-year 2020 were down 2 percent year over year to $2.37 billion from $2.41 billion in 2019, beating the Wall Street estimate of $2.29 billion.

The effect of foreign currency translation boosted full year 2020 revenues by less than 1 percent.

Profits for the year were $521.6 million, or $8.36 per share, compared to $592.2 million, or $8.69 per share, in 2019. Adjusted EPS was $9.05, up from $8.99 in 2019, and beating the consensus analyst estimate of $8.31.

For full-year 2020, R&D spending was $140.8 million, down 2 percent from $143.0 million in 2019. SG&A spending was up 4 percent to $553.7 million from $534.8 million the year before.

Waters ended the year with $443.1 million in cash and cash equivalents.

For Q1 2021, Waters estimates constant currency revenue growth of between 7 percent and 10 percent and adjusted EPS in the range of $1.50 to $1.60. Revenue growth for full-year 2021 is expected to be between 5 percent and 8 percent, with anticipated adjusted EPS between $9.32 and $9.57. Analysts are expecting Q1 earnings of $1.52 per share, and full-year 2020 earnings of $9.32 per share.

In Tuesday morning trading on the New York Stock Exchange, shares of Waters were up 10 percent to $294.94.

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