Waters Corporation: Navigating Market Challenges and Delivering Operational Excellence

Waters Corporation (NYSE: WAT) has weathered the storm of 2024 with remarkable resilience, demonstrating its commitment to operational excellence and delivering strong financial results. In the third quarter of 2024, the company reported exceptional performance, with sales exceeding guidance and growing 4% as reported and in constant currency. This impressive feat was driven by a combination of factors, including new product adoption, improved customer spending trends, and strong operational performance.



The company's instruments returned to growth, with liquid chromatography sales to pharma and industrial customers turning positive. Recurring revenue also grew at a high single-digit rate in constant currency, indicating a robust and sustainable business model. All reported regions returned to growth in the quarter, with sales increasing across all end markets, led by the pharmaceutical and industrial markets.



Waters Corporation's focus on operational excellence has been a significant driver of its financial performance. In the third quarter of 2024, the company achieved a gross margin expansion of 170 basis points and an adjusted operating margin expansion of 120 basis points. This operational excellence has enabled the company to maintain its competitiveness and deliver strong financial results, even in challenging market conditions.

Looking ahead, Waters Corporation is confident in its long-term outlook, driven by its strong commercial execution, competitive product portfolio, and excellent operational performance. The company has raised its full-year 2024 sales guidance, now expecting organic constant currency sales growth to be in the range of -0.9% to -0.3%. The company also raised its full-year 2024 non-GAAP EPS guidance to now be in the range of $11.67 to $11.87.



The Wyatt acquisition has contributed to Waters Corporation's financial performance in 2024, with the M&A contribution adding 1.3% to full-year reported sales. The integration progress has been positive, with the team achieving the target sales contribution of 2.5% for the year. The Wyatt acquisition is expected to deliver synergies and contribute to the company's long-term growth and competitiveness.

In conclusion, Waters Corporation has demonstrated remarkable resilience and operational excellence in navigating the challenges of 2024. The company's strong financial performance, driven by new product adoption, improved customer spending trends, and a focus on operational excellence, has positioned it well for continued success in the long term. With a confident outlook and a commitment to delivering value to shareholders, Waters Corporation is well-positioned to capitalize on opportunities in the market.