By Siddhi Mahatole
(Reuters) -Lab equipment maker Waters raised the lower end of its annual profit forecast on Monday after reporting better-than-expected second-quarter results on strong demand from biotech clients for its tools used in drug development and research.
Adjusted profit per share is now expected to be in the range of $12.95 to $13.05, up from its previous forecast of $12.75 to $13.05, partly due to strong commercial growth initiatives, rapid uptake of new products, and incremental growth drivers like GLP-1s, PFAS, generics.
The company left its tariff impact outlook for the second half of 2025 unchanged, but acknowledged that the current trade policy environment had improved versus prior assumption.
In fact, CEO Udit Batra said “if tariff rates were to remain only at current levels, there is about 6 cents of upside to adjusted EPS guidance.”
Shares of Waters, however, fell 3% in morning trading, with analysts noting investor concerns over the high cost and potential integration challenges of the Becton Dickinson deal.
Last month, Waters agreed to buy a bioscience and diagnostics unit spun off from medtech provider Becton Dickinson, expanding its scale in clinical and diagnostic applications.
“(It) is a high-priced deal of a weaker business from a moat-perspective, in our opinion, that could be complicated integration-wise,” said Morningstar analyst Julie Utterback.
Academic and government sales declined by 3% in the second quarter, as the Trump administration proposed deep cuts to scientific research funding, including $18 billion from the National Institutes of Health.
“NIH funding impact was not as significant as we assumed, but we are still quite conservative for the back half of the year,” CEO Batra said.
Still, Waters expects 2025 revenue growth in the range of 5.5% to 7.5%, up from previous projection of 5% to 7%.
The company reported second-quarter adjusted profit per share of $2.95, compared with analysts’ estimates of $2.94.
Its quarterly revenue rose 9% to $771.3 million, above estimates of $748.7 million.
(Reporting by Siddhi Mahatole in Bengaluru; Editing by Shailesh Kuber)
