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Waters Q3 Revenues Up 8 Percent

NEW YORK (GenomeWeb News) – Waters today reported that its revenues in the third quarter were up 8 percent year over year, driven by broad-based demand for its instrument systems.

The company posted revenues of $493.2 million, up from $457.3 million in Q3 2013, and beating the average Wall Street estimate of $486.6 million.

On a conference call following release of the results, Waters Chairman, President, and CEO Douglas Berthiaume said that instrument sales in the Waters division saw high single-digit growth in the quarter with strong demand coming both from pharma and academic and government segments.

He noted that "demand for research-focused UPLC-MS systems was up double digits in the quarter," adding that demand was particularly strong among customers in proteomics and phenomics research.

Both US and European sales were up 9 percent, with solid demand from the pharma and government and academic segments, while in India, Berthiaume said the company "saw a continuation of healthy double-digit sales growth as generic drug firms resumed adding new instruments and replacing old ones."

In China, Waters "finished the quarter with a mid single-digit decline in sales, although a modest increase in orders," he said, adding that the company does not "expect to see a dramatic change [in this market] in the fourth quarter."

More generally, Berthiaume noted growing interest and investment in mass spec within medical research.

"Recognizing that proteomics, metabonomics, phenomics, [are] going to be an important part of delivering meaningful diagnostics and therapeutics, [institutions] are really ramping up the investment in mass spectrometry, particularly in the large-scale academic medical centers where we have had a huge amount of interest and significant order rates," he said.

"I think that piece of the healthcare marketplace is very strong, and you see that reflected in our results and our expectations going forward," Berthiaume added.

The Milford, Mass-based company posted a profit of $113.5 million, or $1.34 per share, during the quarter, compared to a profit of $98 million, or $1.14 per share, for Q3 2013. On a non-GAAP basis, Waters had EPS of $1.38, above the average analyst estimate of $1.29.

The firm's R&D spending was up 16 percent year over year to $27.3 million from $23.6 million a year ago, while SG&A costs rose 1 percent to $122.2 million from $120.6 million.

The company ended the quarter with $1.95 billion in cash, cash equivalents, and investments.

For full-year 2014 the company said it expects sales growth of around 5 percent and non-GAAP EPS to be in the range of $5.34 to $5.44.

For Q4 2014 the company expects sales growth of around 4 to 5 percent and non-GAAP EPS in the range of $1.83 to $1.93.

In Tuesday morning trading on the New York Stock Exchange, shares of Waters were up 5 percent at $104.29.

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