Waters Corporation ( WAT ) reported second-quarter 2014 non-GAAP earnings of $1.22 per share, beating the Zacks Consensus Estimate by a penny. The adjusted earnings per share reflected a 13.0% year-over-year increase from $1.08 in the prior-year quarter.
Waters Corporation - Earnings Surprise | FindTheBest
The company reported GAAP net income of $96.5 million or $1.13 per share versus $89.3 million or $1.03 a share in the second quarter of 2013.
Waters Corporation benefited from a strong product demand in key regions like the U.S., especially in the pharmaceutical sector, leading to robust organic growth. This apart, a solid balance sheet and healthy cash generation were the other positives.
Revenues
Waters Corporation's revenues came in at $481.8 million compared with $451.1 in the prior-year quarter. Revenues surpassed the Zacks Consensus Estimate of $475 million by 1.4%. The company's sales witnessed a gain of 1% on the back of favorable currency translations in the quarter.
Margins
Gross profit for the quarter was $279.9 million, rising 6.5% from $262.8 million reported in the prior-year quarter. However, gross margin for the quarter was marginally down to 58.1% from 58.3% in the year-ago quarter.
Operating income for the quarter was $118.4 million, increasing 5.1% from $112.7 million in the second quarter of 2013. The company incurred total selling and administrative expenses of approximately $131.9 million in the quarter, an increase of almost 7.1% year over year. Research and Development (R&D) expense was about $27.0 million in the quarter versus $24.7 million in the prior-year quarter. Operating margin stood at 24.6% compared with 25.0% in the second-quarter 2013.
Balance Sheet
Exiting the year, cash, cash equivalents and investments reached approximately $1.92 billion compared with $1.80 billion as on Dec 31, 2013. The company's long-term debt declined to $1.16 billion from $1.19 billion at year-end 2013. However, its total liabilities increased to $1.88 billion compared with $1.82 billion as on Dec 31, 2013.
Moving Ahead
Waters Corporation is likely to benefit from the recovery in the pharmaceutical industry, which is its largest single market, contributing a significant share to total revenue.
Waters Corporation currently has a Zacks Rank #4 (Sell). Some better-ranked companies that can be considered at present include Bruker Corporation ( BRKR ), Synaptics Inc. ( SYNA ) and Noble Group Limited ( NOBGY ). All three carry a Zacks Rank #1 (Strong Buy).
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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.