10-QPeriod: Q1 FY2003

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q1 Ended Jan 31, 2003

Filed March 12, 2003For Securities:A

Summary

Agilent Technologies, Inc. reported a net loss of $369 million, or $0.78 per share, for the three months ended January 31, 2003. This represents a widening of the net loss compared to the prior year's period, which was $315 million, or $0.68 per share. Revenue remained relatively flat, totaling $1.412 billion, a slight decrease from $1.426 billion in the same period last year. The company has implemented significant restructuring plans, resulting in workforce reductions and cost-saving measures, which are beginning to show some impact on reducing operational expenses. However, the company also recorded a substantial $268 million pretax impairment charge related to the adoption of SFAS 142, contributing to the significant increase in the net loss. Despite the net loss, Agilent Technologies' liquidity position remains adequate, with $1.754 billion in cash and cash equivalents at the end of the quarter. The company continues to manage its operational costs through ongoing restructuring efforts, aiming to achieve a breakeven cost structure. However, the outlook for the near term is uncertain, with modest improvements expected in the second quarter, but no significant overall business improvement anticipated in the immediate future. Investors should note the ongoing challenges in the semiconductor and communications markets, which continue to impact the company's performance.

Key Highlights

  • 1Net loss for the quarter increased to $369 million ($0.78/share) from $315 million ($0.68/share) in the prior year.
  • 2Total net revenue remained largely flat at $1.412 billion, down slightly from $1.426 billion year-over-year.
  • 3A significant $268 million pretax impairment charge was recorded due to the adoption of SFAS 142, impacting net loss.
  • 4The company is continuing aggressive restructuring efforts, including workforce reductions, to lower operational costs.
  • 5Cash and cash equivalents stood at $1.754 billion, indicating sufficient liquidity.
  • 6The company faces ongoing market weakness in the communications and semiconductor industries, leading to an uncertain near-term outlook.

Frequently Asked Questions

The primary driver for the increased net loss was a substantial $268 million pretax impairment charge recognized during the quarter due to the adoption of the new accounting standard SFAS 142, which requires goodwill to be tested for impairment rather than amortized. This charge, combined with ongoing operational challenges and flat revenues, contributed to the wider net loss.

Revenue remained relatively flat year-over-year, with total net revenue for the three months ended January 31, 2003, at $1.412 billion, compared to $1.426 billion in the same period of the prior year. While some segments saw minor increases, others experienced declines, resulting in an overall flat performance.

Agilent Technologies is actively implementing significant restructuring plans, including further workforce reductions aimed at achieving a breakeven cost structure. These efforts are focused on reducing operational expenses across various segments and are beginning to yield cost savings. The company is also managing its inventory and capital expenditures tightly.

Yes, Agilent Technologies reported $1.754 billion in cash and cash equivalents at the end of the quarter. This, along with their current liquidity management strategies, indicates sufficient financial resources to meet working capital and capital expenditure needs for the foreseeable future.