Waters Corporation (NYSE:WAT) shares dropped more than 3% in premarket trading on Monday after the company issued first-quarter earnings guidance that missed market expectations, overshadowing better-than-expected fourth-quarter results.
The analytical instruments group reported fourth-quarter adjusted earnings of $4.53 per share, narrowly topping analyst forecasts of $4.51. Revenue came in at $932 million, also slightly ahead of the $928.09 million consensus estimate. Sales increased 7% year over year on a reported basis, or 6% in constant currency.
Despite the Q4 beat, investor focus turned to the outlook. For the first quarter of 2026, Waters projected adjusted earnings of $2.25 to $2.35 per share, well below analysts’ expectations of $2.51. Revenue guidance for the quarter was stronger, at $1.198 billion to $1.211 billion, but the earnings shortfall appeared to drive the negative market reaction.
“Our team delivered industry-leading results in 2025, achieving high single-digit revenue growth and double-digit adjusted EPS growth. We expect this momentum to continue into 2026,” said Udit Batra, President & Chief Executive Officer of Waters Corporation.
Fourth-quarter growth was driven by strength in pharmaceutical and industrial end markets, each posting 8% growth on a reported basis. Chemistry revenue stood out, rising 12% in constant currency as new bioseparations products saw robust customer uptake.
By region, reported sales in Europe jumped 13%, while Asia and the Americas both recorded 4% growth. Recurring revenue, which includes service contracts and precision chemistries, increased 10% year over year.
Looking ahead to the full year 2026, Waters expects organic constant-currency revenue growth of 5.5% to 7.0% and adjusted earnings of $14.30 to $14.50 per share, broadly in line with the analyst consensus of $14.32.
The company also confirmed it plans to complete its acquisition of BD Biosciences and Diagnostic Solutions, a deal expected to add roughly $3 billion to reported revenue in 2026.