01—Abstract
Summary
Summary of the 10-K filed December 20, 2018. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported solid revenue growth in fiscal year 2018, driven by increases across all three of its business segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab.
The company's net revenue reached $4.914 billiona, a 10% increase from the prior year, supported by favorable foreign currency movements and strategic acquisitions. Despite revenue growth, net income saw a significant decrease due to a large discrete tax charge related to the U.S. Tax Cuts and Jobs Act. The company remains focused on product differentiation, enhancing customer experience, and expanding its operating margin through continued investment in research and development and strategic acquisitions, such as ACEA Biosciences Inc. Financially, Agilent maintained a strong liquidity position with substantial cash and cash equivalents.
The company also demonstrated a commitment to shareholder returns through its dividend and share repurchase programs, announcing a new $1.75 billionb repurchase program. Looking ahead, Agilent anticipates continued growth, although it expects foreign currency to have a negative impact on revenue in the upcoming year, which it aims to offset with contributions from recent acquisitions. The company is navigating a dynamic market, emphasizing innovation and operational efficiency to maintain its competitive edge.
02—Key points
Key Highlights
- Agilent Technologies reported a 10% increase in net revenue for fiscal year 2018, reaching $4.914 billion, driven by growth across all three business segments.
- The company completed seven acquisitions in 2018, including ACEA Biosciences Inc. for $250 million, to strengthen its product portfolio, particularly in cell analysis.
- Net income decreased to $316 million in 2018 from $684 million in 2017, primarily due to a $552 million discrete tax charge related to the U.S. Tax Cuts and Jobs Act.
- Agilent ended fiscal year 2018 with $2.247 billion in cash and cash equivalents, demonstrating a strong liquidity position.
- The company announced a new share repurchase program of up to $1.75 billion, signaling continued confidence and commitment to returning capital to shareholders.
- The Life Sciences and Applied Markets segment saw revenue growth of 9%, driven by strong performance in the pharmaceutical market.
- The Diagnostics and Genomics segment grew revenue by 10%, with significant contributions from genomics and companion diagnostics.
- The Agilent CrossLab segment achieved 11% revenue growth, supported by broad-based strength across consumables and services in key end markets.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Agilent Technologies, Inc. kept $0.06.
- Revenue$4.91B100.0%
- Cost of revenue−$2.23B45.5%
- Gross profit$2.68B54.5%
- Operating costs−$1.78B36.1%
- Operating income$904.0M18.4%
- Interest, other & tax−$588.0M12.0%
- Net income$316.0M6.4%
Where FY2018 revenue went
$4.91B- Cost of revenue: $2.23B, 45% of revenue
- SG&A: $1.39B, 28% of revenue
- Net income: $316.0M, 6.4% of revenue
- R&D: $387.0M, 7.9% of revenue
- Interest, other & tax: $588.0M, 12% of revenue
Kept 6.4% as net incomeNet income $316.0M · 6.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed December 20, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $4.91B$4.47B | +9.9% |
| Cost of Revenue | $2.23B$2.06B | +8.3% |
| Gross Profit | $2.68B$2.41B | +11.2% |
| R&D Expenses | $387.00M$341.00M | +13.5% |
| SG&A Expenses | $1.39B$1.25B | +11.0% |
| Operating Expenses | $4.01B$3.67B | +9.4% |
| Operating Income | $904.00M$807.00M | +12.0% |
| Interest Expense | $75.00M$79.00M | −5.1% |
| Net Income | $316.00M$684.00M | −53.8% |
| EPS (Basic) | $0.98$2.12 | −53.8% |
| EPS (Diluted) | $0.97$2.10 | −53.8% |
| Shares Outstanding (Basic) | 321.00M322.00M | −0.3% |
| Shares Outstanding (Diluted) | 325.00M326.00M | −0.3% |
05—Questions
Frequently Asked Questions
What was Agilent's overall financial performance in fiscal year 2018?
In fiscal year 2018, Agilent Technologies reported a 10% increase in net revenue, reaching $4.914 billion. This growth was driven by strong performance across its Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab segments. However, net income decreased significantly to $316 million, primarily due to a substantial one-time tax charge of $552 million related to the U.S. Tax Cuts and Jobs Act.
How did Agilent's different business segments perform?
All three segments showed positive revenue growth. The Life Sciences and Applied Markets segment increased revenue by 9%, with the pharmaceutical market being a key driver. The Diagnostics and Genomics segment saw a 10% revenue increase, fueled by growth in genomics and companion diagnostics. The Agilent CrossLab business achieved the highest growth at 11%, benefiting from strong demand for its consumables and services across various markets.
What is Agilent's outlook and capital allocation strategy?
Agilent anticipates continued growth, though it expects foreign currency headwinds to impact revenue in the next fiscal year, a factor it plans to mitigate with contributions from recent acquisitions. The company remains focused on innovation and operational improvements. Agilent also continues its commitment to shareholder returns, as evidenced by its consistent dividend payments and the approval of a new $1.75 billion share repurchase program.
What was the impact of the U.S. Tax Cuts and Jobs Act on Agilent's financial results?
The U.S. Tax Cuts and Jobs Act enacted in December 2017 had a significant impact on Agilent's 2018 results. The company recorded a discrete tax charge of $552 million, which included a $499 million transition tax on repatriated foreign earnings and a $53 million charge related to the remeasurement of deferred taxes due to the reduced U.S. corporate tax rate. This charge directly contributed to the lower net income reported for fiscal year 2018 compared to 2017.
06—Continue