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Waters Posts 7 Percent Rise in Q2 Revenues, Announces Acquisition of REIMS Technology

NEW YORK (GenomeWeb News) – Waters today reported that its revenues in the second quarter were up 7 percent, driven by broad-based pharmaceutical demand and strong US sales.

The company posted Q2 revenues of $481.8 million, up from $451.1 million in Q2 2013 and beating the average Wall Street estimate of $476.1 million.

It reported a profit of $96.5 million, or $1.13 per share, during the quarter, compared to a profit of $89.3 million, or $1.03 per share, a year ago. On a non-GAAP basis, Waters had EPS of $1.22, beating the average analyst estimate of $1.21.

On a conference call following release of the company's Q2 earnings, Waters Chairman, President, and CEO Douglas Berthiaume said that the firm "benefited from strong shipment volume to pharmaceutical end markets" as a well as "a shift in business to the second quarter" due to first quarter budgetary delays.

Waters division instrument sales grew in the mid-single digits during the quarter, he said, with sales of the company's high-end UPLC-MS systems up double digits in the US.

The company's global and academic business declined slightly, Berthiaume added, with growth in the US offset by drops in Europe and China.

Overall, China sales declined by double digits in the quarter, but, Berthiaume said, "during the closing weeks of the quarter we began to see improving governmental orders, and by the close of the quarter we finished with a moderate increase in orders and a nice sequential pick-up in orders in comparison to the first quarter results."

He said the company anticipates growth in government-funded instrument sales in the second half of 2014 in both the US and China.

For full-year 2013 the company said it expects mid- to single-digit top-line sales growth and non-GAAP EPS in the range of $5.25 to $5.40.

Water's R&D spending in Q2 was up 9 percent year over year to $27.0 million from $24.7 million a year ago, while SG&A costs rose 7 percent to $131.9 million from $123.1 million.

The company ended the quarter with $1.92 billion in cash, cash equivalents, and investments.

Waters also separately announced its acquisition of MediMass' rapid evaporative ionization mass spectrometry (REIMS) technology, an MS ionization approach that can be used for direct analysis of samples for applications including food safety, microbiology, and clinical diagnostics. To date, the REIMS technology has been most prominently employed as part of MediMass' "intelligent knife" device, a tool that uses REIMS to characterize cells as they are cauterized during surgical incisions, allowing, for instance, clinicians to determine the border between cancerous and normal tissue.

Waters did not disclose what it paid for the technology.

In morning trading on the New York Stock Exchange, shares of Waters were up 5 percent at $106.15.

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