10-KPeriod: FY2014

AGILENT TECHNOLOGIES, INC. Annual Report, Year Ended Oct 31, 2014

Filed December 22, 2014For Securities:A

Summary

Agilent Technologies, Inc. reported its fiscal year 2014 results, marked by a significant strategic separation of its electronic measurement business into a new entity, Keysight Technologies, Inc., which was completed on November 1, 2014. This separation effectively reshaped Agilent's operational focus towards its life sciences, diagnostics, and chemical analysis segments. The company reported total net revenue of $6.981 billion, a 3% increase year-over-year, with notable growth in the Life Sciences and Diagnostics (up 3%) and Chemical Analysis (up 5%) businesses, while the Electronic Measurement business saw a 2% increase before its spin-off. Management highlighted positive order growth across all segments, driven by demand in pharmaceutical, biotechnology, food safety, and environmental markets, alongside improvements in communications and semiconductor test markets within the electronic measurement segment. Agilent also announced its decision to exit the Nuclear Magnetic Resonance (NMR) business in the fourth quarter of fiscal 2014, incurring approximately $68 million in related charges. Financially, the company generated operating cash flow of $711 million. While net income decreased to $504 million from $724 million in fiscal 2013, this was influenced by pre-separation costs of $191 million and debt redemption expenses. The company maintained a strong balance sheet with $3.028 billion in cash and cash equivalents. Key strategic moves and operational adjustments position Agilent for continued focus on its core measurement and analytical solutions businesses moving forward.

Financial Highlights

57 data points
Beta

Revenue

$4.05B

48.8% Gross Margin

Net Income

$549.00M

13.6% Net Margin

EPS (Diluted)

$1.62

Total Assets

$10.81B

Cash & Equivalents

$2.22B

Free Cash Flow

$526.00M

Financial Statements
Beta
Revenue$4.05B
Cost of Revenue$2.07B
Gross Profit$1.98B
R&D Expenses$358.00M
SG&A Expenses$1.20B
Operating Expenses$3.63B
Operating Income$419.00M
Interest Expense$110.00M
Net Income$549.00M
EPS (Basic)$1.65
EPS (Diluted)$1.62
Shares Outstanding (Basic)333.00M
Shares Outstanding (Diluted)338.00M

Key Highlights

  • 1Agilent completed the separation of its Electronic Measurement business into Keysight Technologies, Inc. on November 1, 2014.
  • 2Total net revenue increased by 3% to $6.981 billion, with Life Sciences & Diagnostics revenue up 3% and Chemical Analysis revenue up 5%.
  • 3Order growth was positive across all segments, indicating continued demand for Agilent's solutions.
  • 4The company announced its exit from the Nuclear Magnetic Resonance (NMR) business, incurring $68 million in restructuring charges.
  • 5Operating cash flow was $711 million, and the company ended the fiscal year with $3.028 billion in cash and cash equivalents.
  • 6Significant pre-separation costs of $191 million impacted the reported net income for fiscal year 2014.

Frequently Asked Questions

The most significant strategic event was the completion of the separation of Agilent's electronic measurement business into a new, publicly traded company named Keysight Technologies, Inc. This transaction was finalized on November 1, 2014, allowing Agilent to focus on its core life sciences, diagnostics, and chemical analysis businesses.

Agilent reported a 3% increase in total net revenue to $6.981 billion. The Life Sciences and Diagnostics segment saw a 3% revenue increase, and the Chemical Analysis segment grew by 5%. The Electronic Measurement business also showed a 2% revenue increase before its separation. Despite these revenue gains, net income decreased to $504 million from $724 million in the prior year, largely due to $191 million in pre-separation expenses and costs associated with debt redemption.

Agilent decided to exit its Nuclear Magnetic Resonance (NMR) business in the fourth quarter of fiscal year 2014 due to lack of growth and profitability. This decision resulted in approximately $68 million in restructuring and other related costs, including workforce reductions and asset write-downs. The company expects this move to positively impact operating profit by approximately $10 million in fiscal year 2015.

Agilent maintained a strong financial position, ending the fiscal year with $3.028 billion in cash and cash equivalents. The company generated $711 million in net cash from operating activities, indicating solid operational cash flow despite the impact of separation costs. The balance sheet appears healthy, with substantial liquidity to support ongoing operations and future growth initiatives.