Waters Corp. (WAT, Financial) filed Quarterly Report for the period ended 2009-04-04.
Waters Corporation is a holding company which owns only and all of the outstanding common stock of Waters Technologies Corporation the operating subsidiary. It operates in the analytical instrument industry with manufacturing and distribution expertise in three complementary technologies: high performance liquid chromatography instruments chromatography columns and other consumables and related service; mass spectrometry instruments that can be integrated and used along with other analytical instruments; and thermal analysis and rheology instruments. Waters Corp. has a market cap of $4.3 billion; its shares were traded at around $44.33 with a P/E ratio of 13.2 and P/S ratio of 2.8. Waters Corp. had an annual average earning growth of 14.4% over the past 10 years. GuruFocus rated Waters Corp. the business predictability rank of 5-star.
During the 2009 Quarter, sales decreased from the 2008 Quarter in the U.S., Europe, Asia (including Japan) and the rest of world by 6%, 17%, 6% and 16%, respectively. The effect of foreign currency translation lowered the sales rates in the 2009 Quarter by 13% in Europe and 14% in the rest of the world.
In the 2009 Quarter, global sales to pharmaceutical and industrial customers decreased 11% and 17%, respectively, from the 2008 Quarter. This decrease is primarily a result of the reduced spending on instrument systems caused by the global economic recession and the strengthening of the U.S. dollar in developing economies including India, South America and Eastern Europe. Global sales to government and academic customers were 13% higher in the 2009 Quarter and can be primarily attributed to sales of the newly introduced mass spectrometry instrument systems and higher ACQUITY UPLC® instrument systems sales.
Net sales for the 2009 Quarter and the 2008 Quarter were $333 million and $372 million, respectively, a decrease of 10%. Foreign currency translation lowered the 2009 Quarter sales rate by 5%. Product sales were $227 million and $270 million for the 2009 Quarter and the 2008 Quarter, respectively, a decrease of 16%. This decrease in product sales was primarily due to the overall decline in Waters and TA instrument systems and adverse foreign currency translation. Service sales were $106 million and $101 million in the 2009 Quarter and the 2008 Quarter, respectively, an increase of 4%. The increase in service sales was primarily attributable to increased sales of service plans and billings to a higher installed base of customers and approximately three more selling days, offset by adverse foreign currency translation.
The Waters Division net sales decreased 11% in the 2009 Quarter from the 2008 Quarter. The effect of foreign currency translation lowered the Waters Division sales across all product lines by 6% in the 2009 Quarter. Recently acquired companies added approximately 1% to the 2009 Quarter sales over the 2008 Quarter. Chemistry consumables sales were flat in the 2009 Quarter over the 2008 Quarter. Waters Division service sales grew 3% in the 2009 Quarter over the 2008 Quarter due primarily to increased sales of service plans and billings to the higher installed base of customers. In addition, recurring sales of chemistry consumables and service benefited from three more selling days than the 2008 Quarter. There will be conversely less selling days in the Companys fiscal fourth quarter of 2009. Waters instrument system sales (LC and MS) declined 21% in the 2009 Quarter over the 2008 Quarter. The decrease in instrument systems sales is primarily attributable to weak industrial and pharmaceutical customer spending caused by the global recession. Waters Division sales by product line in the 2009 Quarter were approximately 48% for instrument systems, 20% for chemistry consumables and 32% for service as compared to 54% for instrument systems, 18% for chemistry consumables and 28% for service for the 2008 Quarter. Geographically, Waters Division sales in the U.S., Europe, Asia and the rest world declined approximately 6%, 17%, 5% and 17% respectively. This sales decline was primarily due to lower demand from the Companys industrial and pharmaceutical customers; while sales to government and academic customers increased 13%. Asias sales decline in the 2009 Quarter over the 2008 Quarter was primarily driven by very weak sales in India and sluggish demand in Japan. Sales growth in China in the 2009 Quarter over the 2008 Quarter was strong and partially offset the
TAs sales decreased 8% in the 2009 Quarter from the 2008 Quarter primarily as a result of weak instrument system demand from its industrial customers and a 2% adverse effect from foreign currency translation. The impact of acquisitions added approximately 3% to sales in the 2009 Quarter over the 2008 Quarter. Instrument system sales declined 15% in the 2009 Quarter from the 2008 Quarter and represented approximately 75% of sales in the 2009 Quarter as compared to 81% in the 2008 Quarter. TA service sales grew 19% in the 2009 Quarter over the 2008 Quarter and can be primarily attributed to the higher installed base of customers and new service sales to the customers of recently acquired companies. Geographically, the sales decrease for TA was broad-based.
Read the The complete ReportWAT is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., John Hussman of Hussman Economtrics Advisors, Inc., PRIMECAP Management.
Waters Corporation is a holding company which owns only and all of the outstanding common stock of Waters Technologies Corporation the operating subsidiary. It operates in the analytical instrument industry with manufacturing and distribution expertise in three complementary technologies: high performance liquid chromatography instruments chromatography columns and other consumables and related service; mass spectrometry instruments that can be integrated and used along with other analytical instruments; and thermal analysis and rheology instruments. Waters Corp. has a market cap of $4.3 billion; its shares were traded at around $44.33 with a P/E ratio of 13.2 and P/S ratio of 2.8. Waters Corp. had an annual average earning growth of 14.4% over the past 10 years. GuruFocus rated Waters Corp. the business predictability rank of 5-star.
Highlight of Business Operations:
The Companys sales were $333 million and $372 million for the three months ended April 4, 2009 (the 2009 Quarter) and March 29, 2008 (the 2008 Quarter), respectively, a decrease of 10%. Overall, the sales decline in the 2009 Quarter is primarily due to lower instrument spending by the Companys customers as a result of the global economic recessionary conditions as well as the effect of foreign currency translation, which lowered the 2009 Quarter sales by 5%. In the 2009 Quarter, instrument system sales declined 20% while recurring sales of chemistry consumables and service increased 3%. Recently acquired companies added approximately 1% to the 2009 Quarter sales over the 2008 Quarter. The 2009 Quarter also benefited from three more selling days than the 2008 Quarter due to the Companys interim fiscal calendar. As such, there will be conversely less selling days in the Companys fiscal fourth quarter of 2009. The Company anticipated these additional selling days in the Companys business outlook and estimates that these additional selling days contributed approximately 1% to 2% to the 2009 Quarter sales over the 2008 Quarter.During the 2009 Quarter, sales decreased from the 2008 Quarter in the U.S., Europe, Asia (including Japan) and the rest of world by 6%, 17%, 6% and 16%, respectively. The effect of foreign currency translation lowered the sales rates in the 2009 Quarter by 13% in Europe and 14% in the rest of the world.
In the 2009 Quarter, global sales to pharmaceutical and industrial customers decreased 11% and 17%, respectively, from the 2008 Quarter. This decrease is primarily a result of the reduced spending on instrument systems caused by the global economic recession and the strengthening of the U.S. dollar in developing economies including India, South America and Eastern Europe. Global sales to government and academic customers were 13% higher in the 2009 Quarter and can be primarily attributed to sales of the newly introduced mass spectrometry instrument systems and higher ACQUITY UPLC® instrument systems sales.
Net sales for the 2009 Quarter and the 2008 Quarter were $333 million and $372 million, respectively, a decrease of 10%. Foreign currency translation lowered the 2009 Quarter sales rate by 5%. Product sales were $227 million and $270 million for the 2009 Quarter and the 2008 Quarter, respectively, a decrease of 16%. This decrease in product sales was primarily due to the overall decline in Waters and TA instrument systems and adverse foreign currency translation. Service sales were $106 million and $101 million in the 2009 Quarter and the 2008 Quarter, respectively, an increase of 4%. The increase in service sales was primarily attributable to increased sales of service plans and billings to a higher installed base of customers and approximately three more selling days, offset by adverse foreign currency translation.
The Waters Division net sales decreased 11% in the 2009 Quarter from the 2008 Quarter. The effect of foreign currency translation lowered the Waters Division sales across all product lines by 6% in the 2009 Quarter. Recently acquired companies added approximately 1% to the 2009 Quarter sales over the 2008 Quarter. Chemistry consumables sales were flat in the 2009 Quarter over the 2008 Quarter. Waters Division service sales grew 3% in the 2009 Quarter over the 2008 Quarter due primarily to increased sales of service plans and billings to the higher installed base of customers. In addition, recurring sales of chemistry consumables and service benefited from three more selling days than the 2008 Quarter. There will be conversely less selling days in the Companys fiscal fourth quarter of 2009. Waters instrument system sales (LC and MS) declined 21% in the 2009 Quarter over the 2008 Quarter. The decrease in instrument systems sales is primarily attributable to weak industrial and pharmaceutical customer spending caused by the global recession. Waters Division sales by product line in the 2009 Quarter were approximately 48% for instrument systems, 20% for chemistry consumables and 32% for service as compared to 54% for instrument systems, 18% for chemistry consumables and 28% for service for the 2008 Quarter. Geographically, Waters Division sales in the U.S., Europe, Asia and the rest world declined approximately 6%, 17%, 5% and 17% respectively. This sales decline was primarily due to lower demand from the Companys industrial and pharmaceutical customers; while sales to government and academic customers increased 13%. Asias sales decline in the 2009 Quarter over the 2008 Quarter was primarily driven by very weak sales in India and sluggish demand in Japan. Sales growth in China in the 2009 Quarter over the 2008 Quarter was strong and partially offset the
TAs sales decreased 8% in the 2009 Quarter from the 2008 Quarter primarily as a result of weak instrument system demand from its industrial customers and a 2% adverse effect from foreign currency translation. The impact of acquisitions added approximately 3% to sales in the 2009 Quarter over the 2008 Quarter. Instrument system sales declined 15% in the 2009 Quarter from the 2008 Quarter and represented approximately 75% of sales in the 2009 Quarter as compared to 81% in the 2008 Quarter. TA service sales grew 19% in the 2009 Quarter over the 2008 Quarter and can be primarily attributed to the higher installed base of customers and new service sales to the customers of recently acquired companies. Geographically, the sales decrease for TA was broad-based.
Read the The complete ReportWAT is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., John Hussman of Hussman Economtrics Advisors, Inc., PRIMECAP Management.
