Waters Corporation (NYSE: WAT) today announced its financial results for the fourth quarter and full-year 2023.
Sales for the fourth quarter of 2023 were $819 million, a decrease of 4.5% as reported, compared to sales of $859 million for the fourth quarter of 2022. Currency translation had a minimal impact on sales, while the impact of acquisitions increased sales by more than 3%.
On a GAAP basis, diluted earnings per share (EPS) for the fourth quarter of 2023 were $3.65, compared to $3.81 for the fourth quarter of 2022. On a non-GAAP basis, EPS was $3.62, compared to $3.84 for the fourth quarter of 2022. This includes a headwind of approximately 2% due to unfavorable foreign exchange.
For fiscal year 2023, the Company’s sales were $2,956 million, a decrease of 0.5% as reported, compared to sales of $2,972 million for fiscal year 2022. Currency translation decreased sales by approximately 1%, while the impact of acquisitions increased sales by 2.5%.
On a GAAP basis, EPS for fiscal year 2023 was $10.84, compared to $11.73 for fiscal year 2022. On a non-GAAP basis, EPS was $11.75, compared to $12.02 in fiscal year 2022. This includes a headwind of approximately 3% due to unfavorable foreign exchange and a 1% dilution from the Wyatt acquisition.
Waters results in 2023 demonstrate our teams’ strong focus on execution, the competitiveness of our new products, and the resilience of demand in QA/QC and high-volume applications,” said Dr. Udit Batra, President & CEO, of Waters Corporation. “Our focus on operational excellence helped us to deliver exceptional margin expansion even in difficult market conditions.”
Dr. Batra continued, “The year ended with our business benefitting from an expected increase in sales in Q4 versus that of Q3, a testament to our teams’ commitment to innovation that addresses our customers’ greatest needs. We also reached a new chapter in our transformation in 2023 with the acquisition of Wyatt. We have made very good progress integrating the team, achieving our target sales contribution of 2.5% for the year.”
Fourth Quarter 2023
During the fourth quarter of 2023, sales into the pharmaceutical market decreased 6% as reported and 11% in organic constant currency, sales into the industrial market decreased 3% as reported and 4% in organic constant currency, and sales into the academic and government markets decreased 2% as reported and 9% in organic constant currency.
During the quarter, instrument system sales decreased 14% as reported and 20% in organic constant currency, while recurring revenues, which represent the combination of service and precision chemistries, increased 7% as reported and 5% in organic constant currency.
Geographically, sales in Asia during the quarter decreased 18% as reported and 16% in organic constant currency (with China sales declining almost 40%). Sales in the Americas increased 4% as reported and decreased 2% in organic constant currency. Sales in Europe increased 3% as reported and decreased 6% in organic constant currency.
Full-Year 2023
For fiscal year 2023, sales into the pharmaceutical market decreased 3% as reported and 5% in organic constant currency, sales into the industrial market were flat as reported and in organic constant currency, and sales into the academic and government markets increased 13% as reported and 10% in organic constant currency.
For fiscal year 2023, instrument system sales decreased 7% as reported and 10% in organic constant currency, while recurring revenues increased 6% as reported and in organic constant currency.
Geographically, sales in Asia for fiscal year 2023 decreased 11% as reported and 7% in organic constant currency (with China sales declining more than 20%). Sales in the Americas increased 5% as reported and 1% in organic constant currency. Sales in Europe increased 7% as reported and 2% in organic constant currency.
Unless otherwise noted, sales growth and decline percentages are presented on an as-reported basis. A description and reconciliation of GAAP to non-GAAP results appear in the tables below and can be found on the Company’s website www.waters.com in the Investor Relations section.
Full-Year and First Quarter 2024 Financial Guidance
Full-Year 2024 Financial Guidance
The Company expects full-year 2024 organic constant currency sales growth to be in the range of -0.5% to +1.5%. Currency translation is expected to decrease full-year sales growth by approximately 1%. M&A contribution from the Wyatt transaction covering the first four and a half months of the year is expected to increase full-year reported sales growth by 1.3%. The resulting full-year 2024 reported sales growth is expected in the range of 0% to +2%.
The Company expects full-year 2024 non-GAAP EPS to be in the range of $11.75 to $12.05, which includes an estimated headwind of approximately 1% due to unfavorable foreign exchange.
Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the full year.
First Quarter 2024 Financial Guidance
The Company expects first quarter 2024 organic constant currency sales growth to be in the range of -11% to -9%. Currency translation is expected to decrease first-quarter sales growth by approximately 1%. The Wyatt transaction is expected to increase first-quarter reported sales growth by 3.5%. The resulting first quarter of 2024 reported sales growth is expected in the range of -8.5% to -6.5%.
The Company expects first-quarter 2024 non-GAAP EPS to be in the range of $2.05 to $2.15, which includes an estimated headwind of approximately 4% due to unfavorable foreign exchange.
Please refer to the tables below for a reconciliation of the projected GAAP to non-GAAP financial outlook for the first quarter.
Conference Call Details
Waters Corporation will webcast its fourth quarter and fiscal year 2023 financial results conference call today, February 6, 2024, at 8:00 a.m. Eastern Time. To listen to the call and see the accompanying slide presentation, please visit www.waters.com, select “Investors” under the “About Waters” section, navigate to “Events & Presentations,” and click on the “Webcast.” A replay will be available through February 20, 2024, on the same website by webcast and also by phone at (866) 363-1805.
