On February 12, 2025, Waters Corp (WAT, Financial) released its 8-K filing detailing its financial results for the fourth quarter and full-year 2024. Waters Corp, a leader in analytical instruments, reported a notable increase in sales and earnings, surpassing analyst estimates. The company, which provides essential tools for analyzing molecular structures and physical properties, generated 57% of its sales from biopharmaceutical customers, 31% from industrial clients, and 12% from academic/government institutions in 2023.

Performance Highlights and Challenges

Waters Corp reported fourth-quarter sales of $873 million, a 6% increase from the previous year, exceeding the high-end of its guidance range. This growth was driven by an 8% increase in instrument sales and a 9% rise in recurring revenue in constant currency. The pharmaceutical sector saw a 10% growth in constant currency, reflecting strong year-end spending across all regions. Despite these achievements, the company faced foreign exchange headwinds, which adversely impacted earnings by 6% or $0.23 per share.

Financial Achievements and Industry Significance

The company's GAAP earnings per share (EPS) for the fourth quarter was $3.88, slightly below the analyst estimate of $3.91. However, the non-GAAP EPS was $4.10, surpassing the estimate and reflecting a 13% increase from the previous year. These results underscore Waters Corp's strong operational performance and strategic initiatives, which are crucial in the competitive Medical Diagnostics & Research industry.

Key Financial Metrics

For the full year 2024, Waters Corp reported sales of $2,958 million, remaining flat compared to 2023. The GAAP EPS for the year was $10.71, a slight decrease from $10.84 in 2023, while the non-GAAP EPS increased by 1% to $11.86. The company's ability to maintain stable sales and earnings amidst currency fluctuations highlights its resilience and operational efficiency.

“We delivered excellent results in the fourth quarter, led by double-digit growth in Pharma, while instruments and recurring revenue both grew high single-digits in constant currency,” said Dr. Udit Batra, President & CEO, Waters Corporation.

Geographical and Market Segment Performance

Geographically, Waters Corp experienced a 9% sales increase in Asia, a 6% rise in the Americas, and a 10% growth in Europe, all in constant currency. The industrial market saw a modest 2% growth, while the academic and government market experienced a significant 16% increase in constant currency.

Analysis and Outlook

Waters Corp's strong performance in Q4 2024, particularly in the pharmaceutical sector, positions the company well for future growth. The successful execution of strategic initiatives and the adoption of new products have contributed to its robust financial results. However, ongoing foreign exchange challenges and economic uncertainties may pose risks to future performance. The company's guidance for 2025 anticipates continued growth, with non-GAAP EPS expected to range between $12.70 and $13.00, despite anticipated foreign exchange headwinds.

Overall, Waters Corp's ability to navigate challenges and capitalize on growth opportunities underscores its strength in the analytical instruments market, making it a company to watch for value investors.

Explore the complete 8-K earnings release (here) from Waters Corp for further details.