10-QPeriod: Q2 FY2009

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2009

Filed June 9, 2009For Securities:A

Summary

Agilent Technologies, Inc. reported a net loss of $101 million ($0.29 per diluted share) for the fiscal second quarter ended April 30, 2009, a significant decline from the $173 million net income ($0.47 per diluted share) reported in the same period of the prior year. This downturn was primarily driven by a substantial decrease in net revenue, which fell 25% year-over-year to $1.091 billion, reflecting continued weakness across most of its business segments, particularly Electronic Measurement and Semiconductor and Board Test. The company is actively addressing the challenging economic environment through a comprehensive restructuring plan involving significant workforce reductions and cost-saving initiatives, aiming for substantial annual operating savings. Despite the weak top-line performance, Agilent generated $154 million in cash from operating activities during the first six months of fiscal 2009, though this is down from $329 million in the prior year. The company maintained a solid liquidity position with $1.4 billion in cash and cash equivalents. Investors should monitor the execution of the restructuring plan, the impact of ongoing economic pressures on revenue and orders, and the company's ability to return to profitability.

Financial Highlights

30 data points
Beta

Revenue

$1.09B

48.6% Gross Margin

Net Income

-$101.00M

-9.3% Net Margin

EPS (Diluted)

$-0.29

Cash & Equivalents

$1.40B

Free Cash Flow

$103.00M

Financial Statements
Beta
Revenue$1.09B
Cost of Revenue$561.00M
Gross Profit$530.00M
R&D Expenses$170.00M
SG&A Expenses$407.00M
Operating Expenses$1.14B
Operating Income-$47.00M
Interest Expense$23.00M
Net Income-$101.00M
EPS (Basic)$-0.29
EPS (Diluted)$-0.29
Shares Outstanding (Basic)344
Shares Outstanding (Diluted)344

Key Highlights

  • 1Reported a net loss of $101 million for the quarter, compared to a net income of $173 million in the prior year.
  • 2Net revenue declined 25% year-over-year to $1.091 billion, impacted by broad-based weakness.
  • 3Significant order declines were observed across all segments: Bio-analytical (down 16%), Electronic Measurement (down 39%), and Semiconductor & Board Test (down 75%).
  • 4The company is undertaking a large-scale restructuring plan, expecting to reduce approximately 3,800 positions and achieve $525 million in annual operating savings.
  • 5Operating cash flow for the first six months was $154 million, down from $329 million in the prior year.
  • 6The company maintained $1.4 billion in cash and cash equivalents as of April 30, 2009, indicating a stable liquidity position.
  • 7Significant restructuring charges of $134 million were incurred in the first six months of fiscal 2009.

Frequently Asked Questions

The primary driver of Agilent's financial performance was a significant decline in net revenue, down 25% year-over-year to $1.091 billion. This revenue decrease was largely due to continued order and revenue weakness in the Electronic Measurement and Semiconductor and Board Test businesses, driven by reduced investment in manufacturing test markets and overall economic deterioration. This led to a net loss of $101 million for the quarter, compared to a net income in the prior year.

Agilent is implementing a significant restructuring plan to reduce annual operating expenses and adapt to the deteriorating economic conditions. This plan involves workforce reductions totaling approximately 3,800 positions across the company and aims to achieve substantial annual operating savings of approximately $525 million. The company has incurred $134 million in restructuring and other special charges in the first six months of fiscal 2009 related to these actions.

Agilent generated $154 million in cash from operating activities in the first six months of fiscal 2009, a decrease from $329 million in the same period last year, reflecting the impact of lower revenues. However, the company maintained a solid liquidity position, with $1.4 billion in cash and cash equivalents as of April 30, 2009.

All segments experienced revenue declines. Electronic Measurement revenue decreased by 33% and Semiconductor and Board Test revenue by 63% year-over-year for the quarter. The Bio-analytical Measurement segment also saw a 6% revenue decrease, though within this segment, the academic and government, and food safety markets showed improvement and increased revenue. Business in China also demonstrated strength for the Bio-analytical segment.