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

Zacks Equity Research
·3 min read

Waters WAT is scheduled to report its third-quarter 2023 results on Nov 7.

For the third quarter, the company anticipates net sales to decline 4-2% on a constant-currency basis. The Zacks Consensus Estimate for net sales is pegged at $724.83 million, indicating growth of 2.3% from the year-ago quarter’s reported figure.

WAT expects non-GAAP earnings between $2.50 and $2.60 per share. The Zacks Consensus Estimate for the same is pegged at $2.56 per share, suggesting a decline of 3.03% from the year-ago quarter’s reported figure. The estimate has been revised downward by 0.4% over the past 30 days.

Waters’ earnings beat estimates in three of the trailing four quarters while missing the same once, the average being 2.32%.

Let’s see how things have shaped up for this announcement.

Waters Corporation Price and EPS Surprise

Waters Corporation Price and EPS Surprise
Waters Corporation Price and EPS Surprise

Waters Corporation price-eps-surprise | Waters Corporation Quote

Factors to Consider

Strong investments in liquid chromatography instruments, mass spectrometers and chemistries are anticipated to have contributed to the company’s performance in the large molecule market during the to-be-reported quarter.

Further, growing collaborations to integrate technologies, develop analytical solutions, and offer real-time monitoring of process controls and critical quality attributes in the bioreactor are likely to have aided its performance during the third quarter.

These factors are expected to have driven growth in the Waters segment during the third quarter. The Zacks Consensus Estimate for the company’s revenues is pegged at $634.58 million, indicating growth of 1.8% from the year-ago reported figure.

Further, increasing demand in Industrial, Academic & Government end markets, owing to Waters’ revitalized portfolio offerings, is likely to have aided its performance in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter 2023 Industrial revenues is pegged at $227.9 million, indicating growth of 1.75% on a year-over-year basis.

The consensus estimate suggests Academic & Government revenues to climb 9.3% year over year to $85.97 million.

Moreover, the company’s strength in battery testing for electric vehicles, owing to new product launches, is likely to have benefited the TA segment’s performance. The consensus mark for TA revenues is pinned at $87.62 million, implying growth of 2.9% from the reported figure in the prior-year quarter.

However, macroeconomic uncertainties and restricted consumer spending are expected to have acted as headwinds for the company.

Moreover, foreign exchange fluctuations and supply-chain constraints are expected to have negatively affected WAT’s quarterly performance.

What Our Model Says

Per the Zacks model, 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. But that’s not the case here.

Waters has an Earnings ESP of -0.77% and a Zacks Rank #4 (Sell), currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming release:

NetEase NTES has an Earnings ESP of +5.13% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NetEase is set to announce third-quarter 2023 results on Nov 16. NTES shares have gained 54.7% year to date.

Upstart UPST has an Earnings ESP of +9.09% and a Zacks Rank #2.

Upstart is set to announce third-quarter 2023 results on Nov 7. UPST shares have gained 127.5% year to date.

Clarivate CLVT has an Earnings ESP of +5.56% and a Zacks Rank #3.

Clarivate is set to announce third-quarter 2023 results on Nov 7. CLVT shares have declined 16.1% year to date.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Zacks Investment Research