Waters Corporation Reports Mixed Q3 Results with 4% Revenue Growth and 20% Net Income Increase

Waters Corporation reported its financial results for the third quarter and the first nine months of fiscal 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period. For the three months ended September 28, 2024, total net sales reached $740.3 million, a 4% increase from $711.7 million in the same period of 2023. This growth was driven by a 3% rise in product sales to $462.0 million and a 6% increase in service sales to $278.3 million. In contrast, for the nine months ended September 28, 2024, total net sales decreased by 2% to $2.1 billion, down from $2.1 billion in the prior year, primarily due to a 7% decline in product sales, which totaled $1.3 billion.

Operating income for the third quarter improved by 18% to $211.1 million, up from $179.4 million in the prior year, while net income rose 20% to $161.5 million, compared to $134.6 million in Q3 2023. This increase in profitability was attributed to higher sales volume and cost savings, despite incurring $23 million in severance-related costs. However, for the nine-month period, net income fell by 5% to $406.4 million from $426.0 million in 2023.

The company’s acquisition of Wyatt Technology, completed on May 16, 2023, for $1.3 billion, contributed positively to sales growth, accounting for a 2% increase in total sales for the first nine months of 2024. The acquisition also bolstered service revenue, which increased by 5% year-over-year.

Waters Corporation's financial position showed a decrease in total assets, which fell to $4.5 billion as of September 28, 2024, from $4.6 billion at the end of 2023. Total liabilities also decreased significantly to $2.9 billion, down from $3.5 billion, primarily due to a reduction in long-term debt, which decreased to $1.8 billion from $2.3 billion. The company reported total stockholders' equity of $1.6 billion, an increase from $1.2 billion at the end of 2023.

In terms of cash flow, net cash provided by operating activities for the nine months ended September 28, 2024, was $522.0 million, a substantial increase from $372.7 million in the same period of 2023. The company also reported a decrease in capital expenditures, totaling $90 million compared to $119 million in the previous year.

Additionally, Waters Corporation undertook workforce reductions in March 2024, resulting in a 2% decrease in its workforce, primarily in China, due to declining sales. The company incurred severance-related costs of approximately $8 million during this restructuring. The Board of Directors has extended its share repurchase program through January 21, 2025, with $1.0 billion remaining for future repurchases.