May 7 (Reuters) - Waters Corp ( WAT ) beat Wall Street

estimates for first-quarter results on Tuesday, helped by strong

demand for its services used in drug development and research.

Drug contract manufacturers such as Waters saw reduced

spending from their biotech clients last year due to higher

interest rates. However, some analysts predict that funding for

biotechs may stabilize in the current year, especially after a

robust 2023 marked by significant regulatory approvals in the

U.S.

Last month, larger peer Thermo Fisher Scientific ( TMO )

raised its annual profit forecast, betting on improved demand

for its products and services used in drug development.

During the quarter, sales in Waters' instruments unit

decreased 20% to $241.9 million, while its services sales rose

5% to $260.7 million.

Milford, Massachusetts-based Waters supplies lab equipment

and technology for scientists across the world, with the

majority of its revenue coming in from biopharma clients who use

its tools for research and drug development.

The company's quarterly revenue fell 7% to $636.8 million,

ahead of analysts' estimates of $635.6 million, according to

LSEG data.

The lab equipment and software maker continues to see an

annual adjusted profit between $11.75 and $12.05 per share.

Analysts estimate a yearly profit of $11.89.

Waters reported an adjusted profit per share of $2.21 for

the quarter ended March 30, beating market estimates of $2.10.