BulbaMan,
Thanks, that explains things well enough. Trickle will stay away, too.
OK, time for my take on the WAT CC . . .
In general, there were two things that popped WAT after the CC.
The first was unexpected steadiness in the HPLC business. It remained on track, growing at 10%. Some analysts feared discounting by Agilent would create price pressure, but WAT management said this isn't the biggest factor in the customer purchasing decision, and that they weren't seeing any pressure. Also, their HPLC data business is finally getting some traction (I recall someone saying nice things about their software, but I can't recall who. tommysdad, perhaps?).
The second was a statement by the CEO regarding a recent meeting with european pharma execs, in which they told him that they indeed expected to do some CapEx in the second half.
They still see MS growing at 15% long term, however the MicroMass division has slowed to 10% recently. They expect this to ramp back up slowly in Q3, then faster in Q4. They divide their MS biz into three segments: Q-TOF, triple quad, and other (LC-TOF (slowed badly, new MUX products may require some customers to change processes, hence delays), MALDI (not a big player), magnetic sector (inorganic apps; small business, pricey instruments; don't expect much here)), each accounting for roughly 1/3 of their MS business. Q-TOF stayed strong at 40% growth, but triple quads were flat, and others were in the low single digits. They expect the biggest recovery from triple quads, driven by strong interest in the Quattro Micro. Q-TOF Micro didn't ship in volume this Q, but there is apparently strong interest. Quote activity said to be strong. As in last quarter, the MS weakness was attributed to macro issues (i.e. no pharma capex spending) and to the new product intros (theirs and competitors) confusing their customers. They said that the first couple of weeks of Q3 were looking better, but that Qs tend to be back end loaded, so they larded this statement with caution. They noted that MS sales were weakest in the U.S. and U.K., but they do not give numbers by geographic segment.
They expect to name a new COO (CFO was COO) very soon.
FX trimmed 2 cents from the EPS; they see this moderating going forward.
CEO made a comment about a large pharma that warned in June of poor earnings, layoffs, and reduced capex. This pharma then put in the largest order WAT had seen from it in eighteen months. Go figure.
They see Q2 and Q3 as the bottom.
So euphoria about this has caused WAT to tack on five points of late. I see this rally as fading a bit. If it takes WAT to the middle 20s, it would likely be a nice buy.
Next up: ABI and IVGN.
Cheers, Tuck |
