Waters (WAT) to Report Q3 Earnings: What's in the Offing?

Waters Corporation WAT is scheduled to report third-quarter 2020 results on Oct 27.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.91 per share, suggesting a decline of 10.3% from the year-ago quarter.

Further, the consensus mark for third-quarter revenues is projected at $547.15 million, which reflects a decrease of 5.2% year over year.

Notably, the company has beat estimates twice in the trailing four quarters, while missing once and matching in the other. It has a trailing four-quarter negative earnings surprise of 6.05%, on average.

Waters Corporation Price and EPS Surprise

Waters Corporation Price and EPS Surprise

Waters Corporation price-eps-surprise | Waters Corporation Quote

Factors to Consider

Proper execution of Waters’ five-point value-creation model, which emphasizes on its unique specialty positioning, organic innovation, operating excellence, disciplined capital deployment, and strong focus on people and culture, is likely to get reflected in its third-quarter results.

Further, the company’s growing efforts toward normalizing the operating spend and growth investments might have acted as tailwinds in the soon-to-be-reported quarter.

Furthermore, Waters’ new product introductions are likely to have contributed well to the third-quarter performance. Growing momentum across new product lines like BioAccord and Cyclic IMS is likely to have remained positive in the quarter under review.

Moreover, BioAccord, which is the company’s robust liquid chromatography-mass spectrometry solution, is expected to have benefited the Waters segment’s performance in the to-be-reported quarter.

Additionally, the launch of Arc HPLC (high-performance liquid chromatography) is likely to have benefited the company’s position in the core liquid chromatography market during the quarter.

Also, the two new well-performing tandem quad mass spectrometers are likely to have aided the top line in the to-be-reported quarter.

We believethat the company’s strong investments in liquid chromatography instruments, mass spectrometers and chemistries are likely to have contributed to its performance in the large molecule market during the quarter under review.

However, coronavirus-related uncertainties are anticipated to have remained a major headwind. Sluggishness in demand across all the geographies is expected to get reflected in the company’s third-quarter results.

Moreover, the rapidly spreading coronavirus is expected to have dampened the capital purchasing by customers across the key operating market during the third quarter. This is likely to have remained an overhang for the company.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Waters this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Waters has an Earnings ESP of -0.07% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some stocks you may consider, as our proven model shows that thesehave the right combination of elements to post an earnings beat this quarter.

MercadoLibre, Inc. MELI has an Earnings ESP of +258.97% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet Inc. GOOGL has an Earnings ESP of +7.40% and a Zacks Rank of 2.

J2 Global, Inc. JCOM has an Earnings ESP of +2.26% and a Zacks Rank #2.

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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.

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