This article has been updated from a previous version to include additional information from a conference call.
NEW YORK (GenomeWeb News) – Waters said today that its sales increased nearly 10 percent and its net profit swelled almost 35 percent in the third quarter, while it trimmed its R&D costs around 10 percent.
Waters brought in revenues of $386.3 million for the three-month period ended Sept. 27, versus $352.6 million in the third quarter of 2007. Foreign currency translation accounted for around 5 percent of the sales boost, the company said in its earnings statement.
Waters CFO John Ornell said in a conference call this morning that sales in the US rose only one percent on weakening demand from large pharmaceutical companies and a "strong" prior-year comparison. Sales in Europe, meanwhile, rose seven percent, Sales in Japan were up 10 percent, and sales in Asia outside of Japan increased 11 percent.
Ornell said that within the Waters division, instrument systems grew by three percent, while recurring revenues grew nine percent driven by double-digit service growth. the company's TA Instruments division saw sales growth of 14 percent over the prior-year quarter, he said.
The Milford, Mass.-based manufacturer of chromatography, mass spectrometry, and thermal analysis systems posted a profit of $71.5 million, or $.71 per share, for the third quarter, compared to net earnings of $53.3 million, or $.52 per share, for the third quarter of 2007.
Waters’ R&D costs dipped 9 percent to $19.9 million from $22 million, while its SG&A expenses ticked up almost two percent to $107.5 million from $105.6 million.
Company CEO Douglas Berthiaume said in a statement that the strong quarter is an affirmation of the company’s strategy in “these tough economic times.”
The firm finished the quarter with $893 million in cash, cash equivalents, and short-term investments.
Ornell acknowledged the uncertainty in the financial markets, noting that it is likely to lead to slow customer spending, but he added that the company's internal analysis "suggests that businesses will continue to spend on the technologies and solutions we provide and allow us to grow around percent organically in the fourth quarter."
Currency fluctuations should reduce that growth by about 2 percent, bringing overall fourth-quarter growth to around 4 percent, he said.