Strong demand causes Waters Q3 to rise
revenues up 17 per cent to $353m (€248m) compared with the same
period last year.
However while revenues increased, so did cost of sales and administrative costs, leaving pretax profits to rise by 5 per cent to $62m. Research and Development expenditure increased to $2.2m for the quarter and maintained a healthy 6 per cent of revenues. The 17 per cent revenue growth for the quarter compared with the same period last year continued the company's strong year, mirroring the company's 17 per cent growth rate in the second quarter of 2007. "The third quarter results largely indicate a continuation of positive trends that we experienced in the first half of 2007, with improved spending from our global accounts, the expansion of our businesses in Asia and generally healthy industrial demand," said Douglas Berthiaume, Waters CEO. "Our overall pharmaceutical demand was strong in the quarter driven again by generic, CRO (contract research organisations) and speciality pharmaceutical companies." Instrumentation growth continued to be driven by the Acquity UPLC (ultra performance liquid chromatography) and Acquity LC/MS (liquid chromatography / mass spectrometry) product lines with the company receiving positive feedback about the systems from customers. "Mass spectrometry related system sales grew nicely in the quarter led by our high resolution Synapt and Q-TOF lines and our quadrupole-based detector systems," said Berthiaume. "Synapt HTMS technology seems to be driving a revolution in mass spectrometry as customers explore new and exciting ways to utilise the technology in applications that range from protein structure and function studies, to high sensitivity and purity profiling for biopharmaceuticals." He continued by highlighting that the addition of the MALDI (matrix assisted laser desorption ionisation) source was well received after its introduction at the ASMS conference . He also stressed the importance of Waters' chromatography consumables business and service offerings which make up nearly half of the company's sales revenue. "Geographically, our largest market, the United States, continued to perform well with strong double digit growth, contributing to the US performance was accelerated demand from pharmaceutical and University customers," said Berthiaume. He did caution that the company had seen "some softness in demand" from Japan, which he believed was related to general economic conditions in the country and was confident that Waters remained competitive in the marketplace. "China and India are continuing to drive our growth with each of those territories showing strong year over year performance," said Berthiaume. "Our recent business reviews in China and India suggest that current growth rates appear sustainable as these countries continue to modernise and build scientific infrastructure and we continue to invest in people and infrastructure right along with them."