Waters (WAT) Q2 Earnings & Sales Beat Estimates, Fall Y/Y

Core Insights - Waters Corporation reported second-quarter 2024 non-GAAP earnings of $2.63 per share, exceeding the Zacks Consensus Estimate by 3.1%, but down 6.1% year-over-year [1] - Net sales reached $708.53 million, surpassing the Zacks Consensus Estimate of $698 million, although it fell 4% year-over-year on both reported and constant currency basis [1] Financial Performance - The Waters segment accounted for 88% of net sales, generating $622.56 million, a 5% decline year-over-year, while the TA segment contributed $85.97 million, reflecting a 2% year-over-year decline [3] - Instruments sales, making up 41% of total sales, were $294.06 million, down 14% year-over-year; Services sales (39%) were $273.4 million, up 4% year-over-year; Chemistry sales (20%) totaled $141.1 million, also growing 4% year-over-year [4] - The Pharmaceutical market generated $415.75 million in sales (58% of total), down 3% year-over-year; the Industrial market (32%) saw sales of $221.39 million, down 4%; and the Governmental & Academic market (10%) generated $71.4 million, plunging 15% year-over-year [5] Geographic Performance - Sales in Asia (34% of total) were $237.43 million, down 7% year-over-year; the Americas (38%) generated $274.47 million, decreasing 3% year-over-year; and Europe (28%) saw sales of $196.63 million, also down 3% year-over-year [5][6] Operating Details - Non-GAAP selling and administrative expenses were $168.3 million, down 4% year-over-year, while research and development spending was $44.9 million, a slight decrease of 0.2% year-over-year [7] - The adjusted operating margin contracted 40 basis points year-over-year to 29.2% [8] Balance Sheet & Cash Flow - As of June 30, 2024, cash, cash equivalents, and investments totaled $327.4 million, down from $338.2 million as of March 31, 2024 [9] - Cash generated from operations was $54.5 million, down from $262.9 million in the prior quarter, with free cash flow recorded at $143.5 million [9] Guidance - For third-quarter 2024, Waters expects non-GAAP earnings of $2.60-$2.70 per share, with organic sales growth anticipated at 1-3% on a constant-currency basis [10] - For the full year 2024, non-GAAP earnings are projected at $11.55-$11.65 per share, with organic sales expected to decline 2-0.5% on a constant-currency basis [11]