10-QPeriod: Q1 FY2007

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q1 Ended Jan 31, 2007

Filed March 9, 2007For Securities:A

Summary

Agilent Technologies, Inc. reported strong revenue growth of 10% year-over-year for the quarter ended January 31, 2007, reaching $1.28 billion. This growth was primarily driven by a robust performance in the Bio-analytical Measurement segment, which saw a 22% revenue increase. The Electronic Measurement segment also contributed positively, with a 4% revenue rise. Income from continuing operations was $150 million, a decrease from the prior year's $974 million, largely due to a significant gain from the sale of Lumileds in the prior year's period. The company generated $93 million in operating cash flow from continuing operations, a notable improvement from a negative $104 million in the prior year. Strategic initiatives such as four acquisitions totaling $70 million during the quarter aim to strengthen Agilent's instrumentation portfolios. The company also continued its capital return program, repurchasing approximately $254 million worth of its common stock. Looking ahead, Agilent remains focused on pursuing profitable growth by expanding its leadership in core markets and seeking new revenue opportunities through organic growth and complementary acquisitions.

Key Highlights

  • 1Total net revenue increased by 10% to $1.28 billion for the quarter ended January 31, 2007.
  • 2The Bio-analytical Measurement segment showed exceptional growth with revenue up 22% year-over-year.
  • 3Income from continuing operations was $150 million, compared to $974 million in the prior year, reflecting a significant one-time gain in the prior year.
  • 4Operating cash flow from continuing operations improved significantly to $93 million from a negative $104 million in the prior year.
  • 5The company invested $70 million in four acquisitions during the quarter.
  • 6Agilent repurchased approximately $254 million of its common stock in the quarter.
  • 7Overall orders increased by 6% compared to the same period last year.

Frequently Asked Questions

The substantial difference in net income is primarily due to a significant one-time gain of $901 million recorded in the prior year's quarter (ended January 31, 2006) from the sale of an equity investment in Lumileds, as well as a gain of $1.837 billion from the sale of discontinued operations in the prior year. The current quarter's net income of $150 million reflects ongoing operational performance.

Agilent's Bio-analytical Measurement segment experienced strong growth, with revenue increasing by 22% year-over-year. The Electronic Measurement segment also saw revenue growth, increasing by 4% compared to the prior year, although it noted some weakness in the wireless manufacturing test market.

Agilent generated $93 million in cash from operating activities of continuing operations during the quarter ended January 31, 2007. This is a significant improvement compared to the $104 million used in operating activities of continuing operations during the same period in the prior year. This improvement was driven by higher operating income and reductions in restructuring payments and tax settlements.

Agilent's strategy is focused on pursuing profitable growth by expanding its leadership in its core Bio-analytical and Electronic Measurement markets. This will be achieved through increasing market share, expanding market size with new products and channels, and pursuing complementary acquisitions.