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Waters Q2 Revenues Grow 4 Percent

NEW YORK (GenomeWeb) – Waters today reported that its second quarter revenues rose 4 percent, driven by broad-based growth across all of the company's major end markets.

The company posted Q2 revenues of $558.3 million, up from $536.6 million in Q2 2016 and beating the average Wall Street estimate of $553.1 million. Foreign currency translation lowered revenues by 1 percent, the company said.

On a conference call following release of the company's Q2 earnings, Waters Chairman, President, and CEO Christopher O'Connell broke down revenues across the company's various end markets, noting that pharma sales were up 3 percent in the quarter, while industrial sales were up 5 percent, and Waters' government and academic business was up 7 percent.

O'Connell said pharma demand "continues to be driven by macro trends of rising global regulatory standards, increasing worldwide patient access to medical therapy, and growing volume of more demanding biologic drug testing."

On the governmental and academic side, he said, sales growth was driven primarily by demand in Asian and European markets. He added that the company also saw "signs of increased activity with US government-funded accounts."

Waters instrument sales grew 3 percent in the quarter, with O'Connell noting that the company continued to see mass detection "adopted for broader uses," a trend that he said is driving its strategy to integrate LC-MS instrumentation into more streamlined "systems solutions."

Recurring revenues, which includes the company's service and consumables business were up 5 percent in Q2.

From a geographic perspective, Waters saw 13 percent revenue growth in Asia, while sales were up 2 percent in Europe and 3 percent in the Americas.

Waters reported net income of $131.8 million, or $1.63 per share, during the quarter, compared to a profit of $128.2 million, or $1.57 per share, a year ago. On a non-GAAP basis, the company had EPS of $1.76, beating the average analyst estimate of $1.71.

Water's R&D spending in Q2 was up 1 percent to $32.9 million from $32.6 million a year ago, while SG&A costs rose less than 1 percent to $130.2 million from $129.6 million.

The company ended the quarter with $3.1 billion in cash, cash equivalents, and investments.

For the third quarter of 2017 the company anticipates sales growth in the single digits, with currency translation reducing this by around 1 percent. It predicted non-GAAP EPS in the range of $1.68 to $1.78. For full-year 2017 Waters predicted non-GAAP EPS in the range of $7.30 to $7.45. Analysts are expecting EPS of $1.73 for the third quarter and $7.33 for the year.

In morning trading on the New York Stock Exchange, shares of Waters were down 5 percent to $175.88.