Company Performance - Waters reported quarterly earnings of $2.95 per share, exceeding the Zacks Consensus Estimate of $2.93 per share, and up from $2.63 per share a year ago, representing an earnings surprise of +0.68% [1] - The company posted revenues of $771.33 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.63%, compared to $708.53 million in the same quarter last year [2] - Over the last four quarters, Waters has consistently surpassed consensus EPS and revenue estimates [2] Stock Outlook - Waters shares have declined approximately 21.8% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The company's current Zacks Rank is 3 (Hold), indicating expected performance in line with the market in the near future [6] - The consensus EPS estimate for the upcoming quarter is $3.24 on revenues of $777.06 million, and for the current fiscal year, it is $12.91 on revenues of $3.11 billion [7] Industry Context - The Medical - Instruments industry, to which Waters belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Q2 2025 Financial Performance - Q2 2025 revenue reached $771 million, reflecting a 9% increase as reported and an 8% increase in constant currency[11] - Constant currency recurring revenue grew by 11%[11] - Constant currency instrument revenue grew by 4%[11] - Q2 2025 Non-GAAP EPS was $2.95, a 12% increase[11] - Waters division revenue grew by 10% in constant currency, while TA division revenue decreased by 6% in constant currency[33] Regional Performance (Constant Currency) - Asia experienced a 14% revenue growth, with China also at 14%[13] - Americas saw a 2% revenue growth[13] - Europe showed an 8% revenue growth[13] Full Year and Q3 2025 Guidance - The company projects full-year 2025 constant currency revenue growth between 5% and 7%[20] - The company projects Q3 2025 constant currency revenue growth between 4% and 7%[20] - Full-year 2025 Non-GAAP EPS is projected to be between $12.95 and $13.05[20] - Q3 2025 Non-GAAP EPS is projected to be between $3.15 and $3.25[20] Biosciences & Diagnostic Solutions Synergies - The company anticipates $200 million in cost synergies by year 3[26] - The company anticipates $290 million in revenue synergies by year 5[26]

Financial Performance - Sales for Q2 2025 were $771 million, a 9% increase from $709 million in Q2 2024[3] - GAAP EPS for Q2 2025 was $2.47, up from $2.40 in Q2 2024; non-GAAP EPS grew 12% to $2.95 from $2.63[4] - Recurring revenue increased by 11% in constant currency, with service growth at 9% and double-digit growth in chemistry[6] - Pharma sales grew 11% and Industrial sales grew 6% in constant currency; Academic & Government declined 3%[6] - Net sales for the three months ended June 28, 2025, were $771,332, an increase of 9% compared to $708,529 for the same period in 2024[22] - For the six months ended June 28, 2025, net sales reached $1,433,037, reflecting a 7% growth from $1,345,368 in the prior year[26] - Operating income for the three months ended June 28, 2025, was $188,213, slightly down from $189,112 in the same quarter of 2024[22] - Net income for the three months ended June 28, 2025, was $147,111, compared to $142,737 for the same period in 2024, marking a 3% increase[22] - The company reported a diluted net income per share of $2.47 for the three months ended June 28, 2025, up from $2.40 in the prior year[22] - Total recurring sales for the three months ended June 28, 2025, were $462,917, representing a 12% increase from $414,470 in the same period last year[24] Guidance and Projections - Full-year 2025 constant currency sales growth guidance raised to +5.5% to +7.5%[8] - Full-year 2025 non-GAAP EPS guidance raised to $12.95 to $13.05, reflecting a year-over-year growth of approximately +9% to +10%[9] - Q3 2025 constant currency sales growth expected in the range of +5.0% to +7.0%[10] - Q3 2025 non-GAAP EPS expected to be in the range of $3.15 to $3.25, indicating year-over-year growth of approximately +8% to +11%[10] - Projected sales growth rate in constant currency is estimated at 5.5% for the twelve months ended December 31, 2025, and 7.5% for the three months ended September 27, 2025[41] - The company anticipates a sales growth rate of 4.5% for the three months ended September 27, 2025, and 6.5% for the twelve months[41] Regional Performance - Sales in the Asia region for the three months ended June 28, 2025, increased by 12% to $265,940, compared to $237,431 in the same period last year[24] - The pharmaceutical market generated $461,968 in sales for the three months ended June 28, 2025, an 11% increase from $415,747 in the previous year[24] - The company experienced a 10% growth in the Waters segment for the three months ended June 28, 2025, with sales of $688,837 compared to $622,561 in the prior year[24] Expenses and Costs - Research and development expenses for the three months ended June 28, 2025, were $48,548, up from $46,182 in the same quarter of 2024[22] - The company incurred $14,284,000 in acquisition-related costs during the three months ended June 28, 2025[37] - Adjusted Non-GAAP income for the same period was $224,628,000, with a margin of 29.1%, compared to $207,084,000 and 29.2% in the prior year[37] - Operating income for the six months ended June 28, 2025, was $339,958,000, with a margin of 23.7%[37] Assets and Equity - Total assets increased to $4,718,075,000 as of June 28, 2025, up from $4,553,795,000 at the end of 2024[35] - Cash and cash equivalents rose to $367,215,000 from $325,355,000, indicating improved liquidity[35] - The company reported a total stockholders' equity of $2,159,812,000 as of June 28, 2025, up from $1,828,507,000 at the end of 2024[35] - The company’s accounts receivable stood at $730,074,000, slightly down from $733,365,000 at the end of 2024[35] Integration and Strategy - The integration planning with BD Biosciences & Diagnostic Solutions is underway, led by Chris Ross, SVP of Global Operations[5] - The company is focused on driving value creation through synergies from the combination with BD, targeting high-growth adjacencies[5] Earnings Adjustments - GAAP earnings per diluted share projected at $11.45 for the twelve months and $2.70 for the three months, with adjusted non-GAAP earnings per diluted share at $12.95 and $3.15 respectively[41] - Adjustments to earnings include $0.60 for purchased intangibles amortization and $0.53 for acquisition-related costs for the twelve months[41] - Restructuring costs and certain other items account for $0.07 in both the twelve and three-month periods[41] - ERP implementation and transformation costs are projected at $0.25 for the twelve months and $0.08 for the three months[41] - Retention bonus obligation is estimated at $0.05 for the twelve months, with no amount for the three months[41] Miscellaneous - The estimates for future gains and charges are inherently difficult to predict due to unknown timing and significance[42] - Constant currency growth rates are a non-GAAP financial measure that excludes the impact of foreign currency exchange rates[41]

Core Insights - Waters Corporation reported second quarter 2025 sales of $771 million, reflecting a 9% increase as reported and an 8% increase in constant currency compared to $709 million in the same quarter of 2024 [1][13] - The diluted earnings per share (EPS) for the second quarter of 2025 was $2.47, up from $2.40 in the second quarter of 2024, while non-GAAP EPS grew 12% to $2.95 from $2.63 [2][13] - The company is raising its full-year 2025 sales growth guidance to a range of +5.5% to +7.5% in constant currency and +5.0% to +7.0% reported [4][5] Financial Performance - The company achieved a net income of $147.1 million for the second quarter of 2025, compared to $142.7 million in the same quarter of 2024 [18] - Recurring revenue grew 11% in constant currency, with service growth at 9% and double-digit growth in chemistry [13] - The company reported operating income of $188.2 million for the second quarter of 2025, slightly down from $189.1 million in the same quarter of 2024 [17] Market and Product Insights - Instrument sales grew mid-single digits in constant currency, driven by high-single-digit growth in liquid chromatography (LC) and mass spectrometry (MS) [13] - The pharmaceutical market grew 11% in constant currency, while the industrial market grew 6%, and academic & government declined by 3% [13] - The company noted strong instrument replacement trends, particularly among large pharmaceutical and contract development and manufacturing organization (CDMO) customers [3] Guidance and Future Outlook - For the third quarter of 2025, the company expects constant currency sales growth in the range of +5.0% to +7.0% and reported sales growth of +4.5% to +6.5% [6] - Non-GAAP EPS for the third quarter of 2025 is projected to be in the range of $3.15 to $3.25, reflecting year-over-year growth of approximately +8% to +11% [6] - The company is well-positioned for future growth, particularly through its combination with BD Biosciences & Diagnostic Solutions, which is expected to enhance its strategy in high-growth adjacencies [3]

Core Viewpoint - Waters (WAT) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with earnings expected at $2.93 per share, reflecting an 11.4% increase, and revenues projected at $744.33 million, a 5.1% rise [1][3][18]. Earnings Expectations - The upcoming earnings report is scheduled for August 4, and the stock may rise if the reported figures exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4][19]. Earnings Surprise Potential - The Most Accurate Estimate for Waters is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.04%, suggesting a bullish outlook from analysts [12][19]. - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 3 (Hold) [10][12]. Historical Performance - Waters has consistently beaten consensus EPS estimates in the last four quarters, with a recent surprise of +1.35% in the last reported quarter [13][14][19]. Industry Context - Waters operates within the Zacks Medical - Instruments industry, which is characterized by ongoing developments in drug discovery and development [3][18].

Core Insights - The report reveals the operational status and future dynamics of the global and Chinese High-Performance Liquid Chromatography (HPLC) market from 2025 to 2031, highlighting the profound impact of U.S. tariff policies on the HPLC industry and its development trends in the coming years [1] Industry Analysis - The report defines HPLC products and analyzes the core aspects of U.S. tariff policies, indicating that adjustments in these policies affect global supply chains and compel Chinese HPLC companies to accelerate their internationalization to address domestic market saturation and global opportunities [1] - The report predicts the global HPLC industry's scale trends over the next few years, considering optimistic, conservative, and pessimistic scenarios, and assesses the direct impacts of tariff policies on Chinese HPLC companies, including rising costs, increased market entry pressures, and supply chain restructuring challenges [1] Market Share and Competition - The report analyzes the market share of major companies in the global HPLC market, providing revenue, sales, and price data for the past three years, indicating a high market concentration where a few leading companies hold a significant portion of the market [3] - It lists the specifications, parameters, and application fields of HPLC products from major global manufacturers and evaluates the competitive landscape of the industry [3] Strategic Recommendations - The report offers several strategic recommendations for companies, including shifting from export dependence to global capacity layout, optimizing supply chain resilience, diversifying markets, innovating products and building technological barriers, compliance risk management, tariff avoidance strategies, and channel transformation and business model innovation [4] - It forecasts the future landscape of the global HPLC industry, particularly China's role in the global market, emphasizing that the HPLC market will be influenced by technological innovation, policy environment, and market demand [4] Capacity and Market Trends - The report predicts the supply and demand status and future trends of the global HPLC market, indicating steady growth in global HPLC capacity over the next few years, with major regions' market sizes expected to continue expanding [4] - It analyzes the growth potential of traditional and emerging markets, focusing on regions such as ASEAN, Russia, Eastern Europe, Mexico, Brazil, the Middle East, and North Africa [4] Product Types and Applications - The report provides a segmented analysis of the HPLC market by product types such as UVS, FD, RID, ED, and CD, noting their varying market performances, and covers application areas including pharmacies, biotechnology, CROs, academia, and chemical products [4] - It predicts future development trends for each product type and application, supported by detailed data [4] Major Manufacturers - The report lists key manufacturers in the HPLC market, including Agilent, Waters, Shimadzu, Thermo Fisher, PerkinElmer, Hitachi, Jasco, Knauer, Bekman, YoungLin, GBC, and Gilson, detailing their product specifications, market performance, and latest developments [5]

Core Viewpoint - Monteverde & Associates PC is investigating Waters Corporation regarding its merger with BD and Company's Biosciences and Diagnostic Solutions, questioning the fairness of the deal for existing shareholders [1]. Company Overview - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has recovered millions for shareholders [1]. - The firm is located in the Empire State Building, New York City, and specializes in class action securities litigation [2]. Merger Details - Upon completion of the proposed merger, existing Waters shareholders are expected to own approximately 60.8% of the combined company [1].

Core Insights - Becton, Dickinson and Company (BDX) and Waters Corporation (WAT) have announced a strategic collaboration to merge BD's Biosciences Diagnostic Solutions business with Waters' analytical technologies expertise, creating a new entity focused on high-throughput testing in life sciences and diagnostics [1][9] Transaction Details - The merger has been unanimously approved by both companies' boards and is expected to close by the end of Q1 2026, pending regulatory and shareholder approvals [2] - BD will receive $4 billion in cash and hold a 39.2% stake in the new entity through a Reverse Morris Trust structure [8][12] Financial Projections - The combined company aims for $6.5 billion in revenues by 2025, with projections of reaching $9 billion and $3.3 billion in EBITDA by 2030 [8][11] - The total addressable market is expected to double to approximately $40 billion, allowing access to adjacent segments [10] Synergy and Growth Potential - The merger is projected to generate approximately $200 million in cost synergies by the third year post-closing and $290 million in revenue synergies by the fifth year [13] - Annualized EBITDA gains of about $345 million are anticipated by 2030, reinforcing the long-term value creation potential of the transaction [13] Market Position and Performance - BD currently has a market capitalization of $50.76 billion and an earnings yield of 8.1%, outperforming the industry average of 5.3% [5] - BDX shares have lost 21.9% year-to-date, contrasting with a 6.1% gain in the S&P 500 during the same period [3]

Core Insights - Waters Corporation and BD have completed a $17.5 billion merger, with Waters holding a 60.8% stake, driven by strategic alignment, technological complementarity, attractive financial terms, and manageable antitrust risks [1][10] Strategic Alignment - The divestiture of BD's life sciences business aligns with its focus on medical technology, while Waters, as a pure scientific instrument company, matches BD's business logic [2] - Non-competitive business areas between Waters and BD mitigate the risk of overlap from other major players [2] - BD's use of a reverse Morris Trust structure allows it to retain 39.2% equity in the merged entity and receive $4 billion in cash for shareholder value maximization [2] Technological Complementarity - The merger creates a comprehensive solution from bioanalysis to clinical testing, addressing core needs in life sciences and diagnostics [3] - Waters' ACQUITY UPLC and Xevo mass spectrometry platforms provide high-precision analysis, while BD's flow cytometry and molecular diagnostics focus on rapid clinical sample testing [3] Market Synergy - The total addressable market (TAM) for the combined entity is expected to double from $19 billion to $40 billion, covering high-growth areas like biopharmaceuticals and microbiological diagnostics [4] - The customer bases of Waters and BD are complementary, allowing for cross-selling opportunities post-merger [4] Financial Terms and Integration Capability - Waters' financial structure remains robust, with a net debt to EBITDA ratio of 2.3, significantly below the industry average [5] - The merger is expected to yield $3.45 billion in annual synergies by 2030, with $2 billion coming from cost savings [5] Antitrust Risk and Acquisition Strategy - The merger faces minimal regulatory resistance due to Waters' lower market share in flow cytometry compared to competitors like Danaher [7] - The reverse Morris Trust structure offers unique tax advantages for BD shareholders, making it more attractive than cash offers from other bidders [8] Industry Trends and Long-term Growth Potential - The rise of biopharmaceuticals and precision medicine is driving demand for high-sensitivity analytical tools, which the merger addresses effectively [9] - The combination of Waters' Empower™ platform and BD's automation systems enhances laboratory efficiency, providing a comprehensive "hardware + software + service" solution [9]

Core Viewpoint - The merger between BD and Waters aims to create a new leader in the life sciences and diagnostics sector, targeting the expanding precision medicine and biopharmaceutical markets with a total transaction value of approximately $17.5 billion [1][4][17]. Recent Developments and Future Outlook - In February 2025, BD announced plans to divest its biosciences and diagnostics business, followed by the merger agreement with Waters on July 14, 2025, with completion expected by the end of Q1 2026, pending regulatory approval [3]. - The global life sciences instrument market is projected to reach $85 billion by 2030, with a CAGR of approximately 5-6%, highlighting significant growth opportunities in precision medicine, biopharmaceuticals, and multiplex diagnostics [3]. Strategic Motives - The transaction reflects a strategic shift for both companies: BD focuses on core medical technologies, while Waters seeks to transform its business model from single instrument sales to recurring revenue in diagnostics and services [4][5]. - BD's divestiture aligns with its strategy to concentrate resources on core products like syringes and smart medical devices, which are closely tied to hospital workflows [4][7]. Industry Landscape and Market Opportunities - The merger occurs in a competitive environment where major players like Thermo Fisher and Danaher have expanded through acquisitions, creating pressure on mid-sized analytical instrument companies [5]. - The new company is expected to leverage BD's established presence in Asia, particularly in China and Japan, to enhance global expansion potential [3]. Technical Complementarity - The merger is significant for its technical complementarity, enabling a full chain capability from molecular analysis to cellular detection, which is crucial for biopharmaceutical development and personalized medicine [9][10]. Synergies and Collaborative Value - BD and Waters anticipate achieving approximately $200 million in cost synergies and $290 million in revenue synergies post-merger, but the focus is on the broader industry collaborative value rather than just financial metrics [11]. - The integration of technologies and market strategies is expected to enhance their competitive edge in the life sciences sector [12][16]. Product and Service Integration - The combined entity will offer a comprehensive solution that integrates molecular diagnostics and analytical capabilities, addressing the full spectrum of biopharmaceutical research and clinical validation needs [15]. - The merger allows for the development of complex multiplex testing products, enhancing diagnostic speed and accuracy [15]. Conclusion - The merger between BD and Waters represents a transformative move in the life sciences and diagnostics industry, positioning the new company as a key player in advancing precision medicine and biopharmaceutical innovation [17].