Waters 1Q Earnings Expected to Miss - Analyst Blog

By Zacks Equity Research,

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Connecticut-based scientific instruments company, Waters Corp. ( WAT ) is set to report its first-quarter fiscal 2013 results on Apr 23 rd . In the last quarter it posted a 0.63% positive surprise. Let's see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Last quarter was a mixed one for Waters where it  surpassed the Zacks Consensus Estimate for earnings but missed the Zacks Estimate for revenues. Sales grew 1.5% and earnings per share grew 1.9% year over year in the quarter.

Earnings during the quarter benefited from the company's initiatives to control expenses and maintain disciplined pricing. The company's top-line figures increased organically due to a stable pharmaceutical demand and strong sales in Asia. Waters' partnership with DANI instruments benefited the company strongly. Waters had been consistently reporting double-digit growth in monthly sales until January this year.

Earnings Whispers?

Our proven model does not conclusively show that Waters is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: This is because the Most Accurate Estimate stands at $1.08 while the Zacks Consensus Estimate is higher at $1.09. There is a difference of -0.92%.

Zacks Rank #4 (Sell): We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies operating in the same sector that you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

  • Synaptics Inc. ( SYNA ), Earnings ESP of +5.56% and a Zacks Rank #1 (Strong Buy)
  • Gilead Sciences Inc. ( GILD ), Earnings ESP of +2.08% and a Zacks Rank #2 (Buy)
  • Logitech International SA ( LOGI ), Earnings ESP of +81.82% and a Zacks Rank #3 (Hold)

GILEAD SCIENCES (GILD): Free Stock Analysis Report

LOGITECH INTL (LOGI): Free Stock Analysis Report

SYNAPTICS INC (SYNA): Free Stock Analysis Report

WATERS CORP (WAT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: GILD , LOGI , SYNA , WAT

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