Shares of Waters Corp. jumped Tuesday, after the company opened earnings season for life science research companies with a bang by reporting a 39 percent boost in second-quarter profit.
The stock rose $6.91, or 11.1 percent, to end at $69.23. Shares have traded between $51.92 and $81.84 over the last 52 weeks, and are off 21 percent since the start of the year.
Early Tuesday, Milford, Mass.-based Waters said strong sales of its research and analytical equipment, which are used throughout the health care, consumer and industrial industries, were strong during the quarter. Profit of 82 cents per share, or 76 cents after adjusting for a charge, bested Wall Street forecasts for 71 cents per share.
Revenue, meanwhile, rose 13 percent to $398.8 million, also topping expectations.
"The company has traditionally received a knee-jerk reaction from investors as the most leveraged to the pharma market, but this quarter proved that this is no longer the case," said Deutsche Bank-North America analyst Ross Muken. "Waters saw strong demand across all its major markets, with industrial, environmental, and food and beverage applications all showing strong double digit growth."
The company expects continued growth and raised guidance for the full-year to between $3.25 and $3.35 per share from a prior outlook for $3.20 to $3.30 a share. Revenue growth is still expected to range from 11 percent to 13 percent, implying revenue between $1.64 billion and $1.66 billion.
Analysts polled by Thomson Financial expect profit of $3.27 per share on revenue of $1.64 billion.
Muken reaffirmed a "Buy" rating and his $78 price target, citing the company's strong growth through existing business. He also said the entire life sciences sector is benefiting from broader customer bases and that trend will likely continue despite any potential global economic problems.
Like many of its peers, the company is seeing a boon from emerging markets like China and India, where life sciences research services and products are in demand. Waters had 22 percent growth in Asia, versus 6 percent growth in the U.S.
Meanwhile, Lehman Brothers analyst Charles Butler reaffirmed an "Equal Weight" rating, also citing the benefit of higher demand from a broader set of customers.
Looking ahead, the company expects third-quarter profit between 73 cents and 77 cents per share, with analysts forecasting 72 cents per share.
Elswehere in the sector, shares of Water's peers got a boost. Milford, Mass.-based Quest Diagnostics Inc., which reported a 14 percent boost in second-quarter profit, rose $2.65, or 5.2 percent, to close at $54 Tuesday.
Meanwhile, Waltham, Mass.-based PerkinElmer Inc. and Thermo Fisher Scientific Inc. gained ahead of their anticipated earnings reports Thursday. PerkinElmer shares added $1.45, or 5.2 percent, to $29.11 while Thermo shares gained $3.20, or 5.7 percent, to $59.33.
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