10-QPeriod: Q2 FY2004

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2004

Filed June 3, 2004For Securities:A

Summary

Agilent Technologies, Inc. reported strong financial performance for the quarter ended April 30, 2004, with net revenue reaching $1,831 million, a 25% increase year-over-year. This growth was driven by double-digit increases across most markets and geographies, particularly in Asia-Pacific, fueled by the strong consumer electronics and semiconductor components sectors. The company achieved its third consecutive quarter of net income since fiscal 2001, with net income for the period totaling $104 million. Agilent has successfully implemented its ERP and CRM systems, beginning to realize benefits in cost savings and operational improvements. The company generated $212 million in cash from operating activities, marking the third consecutive quarter of positive cash flow, and improved inventory management with days on hand reduced to 92. Looking ahead, Agilent anticipates continued gradual recovery and strong business levels through the end of 2004 and into 2005. The company is focused on cost reduction efforts to achieve its target operating cost structure and is well-positioned for continued growth. Agilent has also made significant progress in its restructuring efforts, reducing its workforce by approximately 16,000 employees since initiating these plans.

Key Highlights

  • 1Total net revenue increased by 25% year-over-year to $1,831 million for the three months ended April 30, 2004.
  • 2Net income for the quarter was $104 million, a significant improvement from a net loss of $146 million in the prior year's period.
  • 3Orders showed strong growth of 24% year-over-year, reaching their highest levels in three years.
  • 4Operating expenses were significantly lower year-over-year, reflecting benefits from restructuring efforts.
  • 5Net cash provided by operating activities was $212 million for the six months ended April 30, 2004, indicating improved operational cash generation.
  • 6Inventory days on hand improved to 92 days from 106 days year-over-year, demonstrating better inventory management.
  • 7The company's Semiconductor Products segment showed robust growth, with revenue up 40% year-over-year.

Frequently Asked Questions

The primary driver of Agilent's revenue growth is the continued strength in the consumer electronics and semiconductor components markets. This has led to double-digit growth in orders and net revenue across most of their major markets and geographies, with a particularly strong performance in the Asia-Pacific region.

Agilent has shown a significant improvement in profitability. For the three months ended April 30, 2004, the company reported a net income of $104 million, a substantial turnaround from a net loss of $146 million in the same period of the prior year. This improvement is attributed to revenue growth and successful cost reduction efforts through their restructuring programs.

Agilent has made substantial progress in its restructuring efforts, which began in 2001. As of April 30, 2004, the company had reduced its workforce by approximately 16,000 employees. These efforts have contributed to lower operating expenses year-over-year and have helped the company achieve its target operating cost structure. The company expects to realize further savings from these initiatives.

Agilent generated $212 million in net cash from operating activities for the six months ended April 30, 2004, marking the third consecutive quarter of positive cash flow. The company has also improved its working capital management, reducing inventory days on hand to 92 and decreasing days sales outstanding to 54. Agilent believes its current cash and cash equivalents are sufficient to meet its needs for at least the next twelve months.