NEW YORK (GenomeWeb) – Waters today reported that its fourth quarter revenues were up 7 percent compared to the year-ago period.
For the three months ended Dec. 31, 2016, Waters' total revenues increased to $628.8 million from $586.6 million in Q4 2015, besting the consensus analyst estimate of $615.9 million.
The effect of foreign currency translation reduced Q4 revenues by 2 percent, the company said.
On a conference call following the earnings release, Waters CEO Christopher O'Connell cited pharma sales as the main growth driver in the quarter, noting that factors such as "rising global regulatory standards, increasing global patient access to prescription drugs, and the growing testing needs of newer biologic drugs" bolstered the company's pharma business both during the quarter and throughout 2016.
Waters' industrial business also had a strong Q4, posting a 13 percent jump in revenues, driven in large part by demand for food safety testing, O'Connell said.
Academic and government sales were up as well, growing 5 percent in the quarter. This growth was led by increased demand from academic customers in Europe where the company saw "a notable increase in installations of new research grade mass spectrometry instruments" along with an uptick in sales to governmental agencies in the Asia Pacific region, O'Connell said. He noted in particular that the company saw strong European sales of its recently released Vion QTOF mass spec.
But while the US academic and government market was strong in Q4, growth in this market was negative for full year 2016, which O'Connell said contributed to a 4 percent decline in Waters' academic and government business in full year 2016.
Instrument platform sales grew 7 percent in Q4 with LC and LC-MS platforms performing about equally. Full-year sales were up 6 percent. O'Connell cited the company's Xevo tandem mass spectrometers as one of its strongest performing LC-MS lines.
Recurring revenues, comprising the company's services and consumables business, grew at 7 percent in the quarter and were up 8 percent in full year 2016.
In the Americas sales were up 1 percent in Q4, with growth in pharma, industrial, and government and academic markets offset by weaker growth from "newer clinical diagnostic installations [and] and applied industrial markets O'Connell said. Full-year sales in the Americas were up 2 percent with balanced growth from pharma and industrial markets and declines in the academic and government segments.
European growth was up 5 percent in Q4, led by strong growth in pharma. For full-year 2016, European revenues were up 4 percent.
Sales in China were up double digits in 2016, with pharma demand particularly strong, O'Connell said. Sales in India were also up double digits. Sales in Japan were up 6 percent in Q4 and 4 percent over the full year.
Net income for the quarter was $174.4 million, or $2.15 per share, up from $151.1 million, or $1.83 per share in Q4 2015. On an adjusted basis, the company reported EPS of $2.21, beating the consensus Wall Street estimate of $2.13.
R&D spending in the quarter was up 16 percent year over year to $32.8 million from $28.3 million, while SG&A costs rose 1 percent to $130.2 million from $128.7 million.
Revenues for full-year 2016 increased 6 percent year over year to $2.17 billion from $2.04 billion in 2015, beating the Wall Street estimate for revenues of $2.16 billion.
Profits for the year were $521.5 million, or $6.41 per share, up from $469.1 million, or $5.65 per share, in 2015. Adjusted EPS was $6.62, beating the consensus analyst estimate of $6.54.
For full year 2016, R&D spending was $125.2 million, up 6 percent from $118.5 million in 2015. SG&A spending was up 3 percent to $513.0 million from $495.7 million the year before.
Waters ended the year with $2.81 billion in cash, cash equivalents, and investments.
For Q1 2017, Waters estimates adjusted EPS to be in the range of $1.26 to $1.36, CFO Sherry Buck said on the call. Adjusted EPS for full-year 2017 is anticipated to be between $6.85 and $7.10, she said. Analysts are expecting Q1 earnings of $1.37 per share, and full-year 2017 earnings of $7.01 per share.
In Tuesday morning trading on the New York Stock Exchange, shares of Waters were down more than 3 percent to $140.21.