What to expect from Waters Corporation's (WAT) Q3 earnings

What happened

Waters Corporation, a scientific instruments company, will report quarterly earnings on Tuesday morning. Last quarter it reported revenue of $1.65 billion, up 113% year on year, with a narrow beat of analyst earnings-per-share estimates and next-quarter revenue guidance meeting expectations.

Confirmed

Global impact / market context

The market expects Waters' revenue to grow 119% this quarter, far above the 8% growth in the same quarter last year. Analysts reconfirmed estimates in the last 30 days, so the report will show whether that sharp expected jump in sales is actually delivered.

Analyst inference

Peers Avantor and Thermo Fisher already reported revenue growth of 4.6% and 9.1%, beating estimates. Their results give a hint for Waters. Waters also has a history of exceeding Wall Street expectations, so investor positioning may hinge on whether it keeps beating again.

Analyst inference

What to watch

1. Waters' actual revenue against the 119% year-on-year growth the market expects, compared with the 8% increase it recorded in the same quarter last year. Confirmed
2. Watch whether Waters issues revenue guidance for the next quarter that meets or exceeds analyst expectations, after last quarter's guidance met expectations rather than beating them. Proposed
3. Compare Waters' results with Avantor's 4.6% and Thermo Fisher's 9.1% revenue growth to judge whether demand in research tools is broad or company-specific. Analyst inference

Evidence

• stockstory.org