* Q1 EPS beats estimates by 17 cents
* Q1 net sales down 10 pct to $333.1 mln vs est $336.5 mln
* Gross margin increases 3.5 percentage points
* Shares up as much as 20 pct
April 28 (Reuters) - Waters Corp (WAT.N), which makes drug research tools, reported a 7 percent higher first-quarter profit that trumped analysts' estimates, helped by improved gross margin and lower expenses, sending its shares up as much as 20 percent.
The company's gross margin for the quarter improved 3.5 percentage points year-over-year to 61.7 percent. Selling and administrative expenses fell about 6 percent to $99.2 million.
The company reported first-quarter net income of $73.3 million, or 75 cents a share, compared with $68.5 million, or 67 cents a share, a year earlier.
Excluding items, it earned 74 cents a share.
Revenue, which fell 10 percent to $333.1 million for the period, included an adverse foreign currency translation impact of about 5 percent.
Analysts were expecting Waters to earn 57 cents a share, before items, on revenue of $336.5 million for the quarter.
Shares of the company were up about 14 percent at $42.93 in morning trade Tuesday on the New York Stock Exchange. They touched a high of $45.30 earlier.
For the alerts, please click [ID:nWNAB9057]. For the press release, please click [ID:nBw285193a] (Reporting by Suzannah Benjamin in Bangalore; Editing by Ratul Ray Chaudhuri)