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Exploring Waters Corporation’s Operational Performance

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Operating expenses

Waters Corporation (WAT) incurred selling and administrative expenses of $136.6 million in the second quarter compared to $130.1 million in the second quarter of 2017. This increase was attributable to an increase in its head count and merit compensation.

Waters’ research and development expenses also increased from $32.94 million in the second quarter of 2017 to $35.64 million in the second quarter of 2018.

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Waters incurred litigation settlement expenses of $10.02 million in the second quarter of 2017. In the second quarter of 2018, it did not incur any litigation expenses. The company’s amortization on intangibles decreased marginally from $1.69 million in the second quarter of 2017 to $1.6 million in the second quarter of 2018.

Waters’ total costs and operating expenses increased from $404.37 million in the second quarter of 2017 to $417.03 million in the second quarter of 2018. Its operating income rose from $153.88 million in the second quarter of 2017 to $179.19 million in the second quarter of 2018.

Bottom line

Waters’ interest expense decreased from $14.08 million in the second quarter of 2017 to $11.69 million in the second quarter of 2018. Its interest income increased from $8.37 million in the second quarter of 2017 to $8.89 million in the second quarter of 2018. Waters’ provision for income taxes increased from $16.25 million in the second quarter of 2017 to $18.88 million in the second quarter of 2018.

Waters generated net income of $155.68 million in the second quarter compared to its net income of $131.82 million in the second quarter of 2017. This translated into net EPS of $1.98 in the second quarter. Its net EPS were $1.63 in the second quarter of 2017.

We’ll take a look at Waters Corporation’s valuation metrics in the next article.

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