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Waters Q2 Revenues Grow 3 Percent

NEW YORK(GenomeWeb News) – Waters today reported that its revenues in the second quarter were up 3 percent, driven by continued strength in LC and mass spec instrument sales and solid demand from the pharmaceutical market.

The company posted Q2 revenues of $494.7 million, up from $481.8 million in Q2 2014 and beating the average Wall Street estimate of $481.7 million. Foreign currency translation reduced sales growth by 7 percent in the quarter.

Waters reported a profit of $105.7 million, or $1.27 per share, during the quarter, compared to a profit of $96.5 million, or $1.13 per share, a year ago. On a non-GAAP basis, the company had EPS of $1.32, beating the average analyst estimate of $1.27.

On a conference call following release of the company's Q2 earnings, Waters Chairman, President, and CEO Douglas Berthiaume said that the firm saw strong demand from its pharma customers, with sales up 11 percent in the quarter.

Sales growth of LC and mass spec instruments was also solid, growing at a 13 percent clip. In particular, demand was strong for the company's Xevo tandem quadrupole mass specs and QDa mass detector technologies, Berthiaume said.

Recurring revenues, the combination of the company's services and consumables business, were up 9 percent on the quarter.

Geographically, Waters division sales were up 10 percent in theUS, driven by strong demand from pharma, Berthiaume said. Constant currency sales growth in Europe was up 5 percent, with strong demand in Western Europe offsetting a weaker performance inEastern Europe.

Revenues in China were up for the third straight quarter after slumping for much of 2014. Sales "were up at a strong double-digit rate with sales to government and academic labs augmenting the continued trend of strong growth from private sector labs," Berthiaume said.

For the third quarter of 2015 the company anticipates sales growth of around 7 percent, with currency translation reducing this by approximately 7 percent. It predicted non-GAAP EPS in the range of $1.33 to $1.43.

For full-year 2015 Waters said it expects 7 percent to 8 percent constant currency sales growth, which currency effects will reduce by roughly 6 percent. It predicted full-year non-GAAP EPS in the range of $5.75 to $5.90.

Water's R&D spending in Q2 was up 11 percent to $30.1 million from $27.0 million a year ago, while SG&A costs fell 7 percent to $122.7 million from $131.9 million.

The company ended the quarter with $2.21 billion in cash, cash equivalents, and investments.

In morning trading on the New York Stock Exchange, shares of Waters were up 2 percent at $132.43.