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Is Waters Corp. (WAT) Q3 Earnings Set to Surprise Again?

We expect Waters CorporationWAT to beat earnings expectations when it reports third-quarter 2015 results, before the opening bell, on Oct 27.

Waters Corp. has a solid earnings track record over the past few quarters with the company beating earnings estimates in the trailing four quarters. The average earnings surprise over the last four quarters is 8.92%.

Why a Likely Positive Surprise?

Our proven model shows that Waters Corp. has the right combination of two key ingredients to beat earnings.

Zacks ESP: The Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.44%. This is very meaningful and leading indicator of a likely positive earnings surprise for the stock.

Zacks Rank: Waters Corp. carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have significantly higher chance of beating earnings. Sell-rated stocks (#4 and 5) should not be considered going into an earnings announcement.

The combination of Waters Corp.'s Zacks Rank #3 and ESP of +1.44% makes us confident of an earnings beat.

Growth Factors This Past Quarter

Waters Corp.'s global pharmaceuticals business, its largest single market and major revenue driver, has been gaining traction over the last few quarters and fueling the growth of Waters Division. Notably, the company has a strong presence in the chromatography instrument and pharmaceuticals markets, and expects to reap enhanced profit from these markets, going forward in 2015.

Also, over the past few months, innovative product launches across Waters and TA Instruments division had remained the focus area for Water Corp. Some of the company's latest offerings include ACQUITY Arc System, Vion IMS QTof Mass Spectrometer, UNIFI Scientific Information System Software and Oasis PRiME HLB. These developments reflect the company's focus on research and development to commercialize new products.

Additionally, Waters Corp's continuous acquisitions are expected to contribute to its revenue stream. The company has been assiduously expanding its technological and business portfolio over time through its acquisition strategy. In the second quarter, Waters Corp. acquired ElectroForce Group from Bose Corporation, which specializes in manufacturing mechanical testing systems based on a proprietary electromagnetic motor technology.

Also, the inclusion of the previously acquired Rapid Evaporative Ionization Mass Spectrometry (REIMS) technology in business is significantly driving growth and the company has introduced advancement to the REIMS research system in the second quarter to extend its surface ionization technologies portfolio.

Other Stocks to Consider

Here are some companies which you may also consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

PerkinElmer Inc. PKI has an Earnings ESP of +1.67% and carries a Zacks Rank #3.

Mettler-Toledo International Inc. MTD has an Earnings ESP of +0.31% and holds a Zacks Rank #3.

Scorpio Tankers Inc. STNG has an Earnings ESP of +14.29% and carries a Zacks Rank #2.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

WATERS CORP (WAT): Free Stock Analysis Report

PERKINELMER INC (PKI): Free Stock Analysis Report

METTLER-TOLEDO (MTD): Free Stock Analysis Report

SCORPIO TANKERS (STNG): Free Stock Analysis Report

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


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

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