10-QPeriod: Q3 FY2007

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q3 Ended Jul 31, 2007

Filed September 7, 2007For Securities:A

Summary

Agilent Technologies, Inc. reported a solid third quarter for fiscal year 2007, with total net revenue increasing by 11% year-over-year to $1.37 billion. This growth was primarily driven by the Bio-analytical Measurement segment, which saw a 19% revenue increase, while the Electronic Measurement segment grew by 7%. The company generated $571 million in operating cash flow from continuing operations for the nine months ended July 31, 2007, a significant improvement from the prior year, reflecting stronger net operating income and reduced restructuring and tax payments. Financially, Agilent maintained a strong balance sheet with $1.49 billion in cash and cash equivalents. The company also demonstrated a commitment to returning capital to shareholders through an accelerated stock repurchase program, having bought back $1.37 billion worth of shares year-to-date. Strategic acquisitions, such as the purchase of Stratagene for $252 million, are contributing to growth, particularly in the Bio-analytical segment. While the company faces some regional market softness, particularly in Japan for its Electronic Measurement business, overall performance indicates continued positive momentum.

Key Highlights

  • 1Total net revenue for the third quarter of fiscal year 2007 increased 11% to $1.37 billion compared to the prior year.
  • 2The Bio-analytical Measurement segment showed robust growth, with revenue up 19% year-over-year.
  • 3The Electronic Measurement segment also experienced positive growth, with revenue increasing 7% year-over-year.
  • 4Operating cash flow from continuing operations significantly improved to $571 million for the first nine months of fiscal year 2007, up from $130 million in the prior year.
  • 5The company repurchased $1.37 billion of its common stock year-to-date under an accelerated stock repurchase program.
  • 6Acquisition of Stratagene for $252 million in cash was completed, contributing to the Bio-analytical segment.
  • 7Despite overall growth, weakness was noted in the Japanese market for the Electronic Measurement business.

Frequently Asked Questions

Agilent Technologies reported an 11% year-over-year increase in total net revenue for the third quarter of fiscal year 2007, reaching $1.37 billion. Income from continuing operations was $185 million. The company also saw a significant improvement in operating cash flow from continuing operations for the nine-month period.

The Bio-analytical Measurement segment demonstrated strong performance with a 19% increase in revenue year-over-year, driven by strength in both chemical analysis and life sciences. The Electronic Measurement segment also showed positive growth, with revenue up 7% year-over-year, although it experienced some weakness in the Japanese market.

Agilent held $1.49 billion in cash and cash equivalents as of July 31, 2007. The company is actively returning capital to shareholders through an accelerated stock repurchase program, having repurchased $1.37 billion worth of stock year-to-date. They also completed the acquisition of Stratagene for $252 million.

Agilent is involved in ongoing tax examinations by the IRS. For the years 2000-2002, the IRS has proposed a net tax deficiency of approximately $405 million, plus penalties and interest. Agilent believes it has strong defenses and intends to contest these claims vigorously, stating that an adverse outcome is unlikely to have a material adverse effect. There are also ongoing legal proceedings related to their IPO, but Agilent believes the likelihood of a material payment is remote.