Waters Corporation (WAT), a leading manufacturer of analytical instruments, saw its stock plunge 6.24% in pre-market trading on Wednesday. This sharp decline can be attributed to the company's weaker-than-expected earnings guidance for the first quarter of 2025, primarily due to the impact of a stronger U.S. dollar on its international operations.

Despite reporting solid fourth-quarter 2024 results that exceeded analysts' estimates for revenue and earnings, Waters Corp. provided a disappointing earnings outlook for Q1 2025. The company forecasted an adjusted profit range of $2.17 to $2.25 per share, falling short of the Wall Street consensus estimate of $2.42 per share.

A key factor behind the weaker guidance is the anticipated currency headwinds resulting from the strengthening U.S. dollar. Waters Corp. expects to face a 7% hit to its first-quarter profit and an approximately 4% impact for the full year 2025 due to unfavorable foreign exchange rates. The company generates more than half of its revenue from international markets, particularly in Asia and Europe, making it vulnerable to currency fluctuations.