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Waters Q3 Revenues Up 13 Percent as Synapt G2-S, Acquity I-Class Start Shipping

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This story originally ran on Oct. 26.

Waters this week reported third-quarter revenues of $454 million, a 13 percent jump from $401 million a year ago.

This beat Wall Street's consensus estimate of $454.5 million. However, the company lowered its full-year 2011 guidance to a range of $4.75 to $4.80 earnings per share from $4.80 to $4.90 due mainly to currency effects.

According to president and CEO Douglas Berthiaume, sales benefitted from the initial shipments of the company's new Synapt G2-S mass spectrometer, which it introduced at the American Society for Mass Spectrometry annual meeting in June, as well as demand for its Xevo TQ-S tandem quadrupole instrument and Acquity H-class UPLC systems.

Customer response to the launch of the Synapt G2-S "has been very strong," Berthiaume said in a conference call discussing the results. He noted, however, that "sales to university labs were down, likely due to a combination of funding issues and ordering delays associated with the continued evaluation of new high-end [mass spec] technology" — a continuation of trends that contributed to the weaker-than-expected Q2 numbers Waters' reported earlier in the year (PM 7/29/2011).

Shipments of new research products like the GS-2 "should benefit university revenues as we close the year," Berthiaume said. He added that the company is "not seeing a dramatic change in the academic environment currently," saying that while uncertainty regarding academic spending is a consideration for 2012, it's "probably not one of the more significant ones."

Waters also began shipping its new Acquity I-Class UPLC systems during the quarter. Sales of the system had little impact on the company's Q3 numbers, but Berthiaume said he expects it "to become the preferred front end in LC-MS instrument shipments in coming quarters."

Net income for the quarter was $101.3 million, or $1.10 per share, a 7 percent increase from $94.7 million, or $1.02 per share, a year ago. On a non-GAAP basis, EPS was $1.14, beating Wall Street estimates of $1.13 per share.

Waters' R&D costs in the third quarter increased to $23.4 million, up 14 percent from $20.5 million a year ago.

It ended the quarter with $1.19 billion in cash, cash equivalents, and short-term investments.

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