10-QPeriod: Q2 FY2011

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2011

Filed June 7, 2011For Securities:A

Summary

Agilent Technologies, Inc. reported strong financial performance for the quarter and six months ended April 30, 2011, with significant year-over-year increases in orders, net revenue, and net income. Total net revenue grew 32% and 29% for the three and six-month periods, respectively, driven by robust performance across all business segments: Life Sciences, Chemical Analysis, and Electronic Measurement. This growth was bolstered by recent acquisitions, notably Varian, Inc., which contributed significantly to revenue and order expansion. The company also successfully integrated three smaller businesses, further diversifying its portfolio. Profitability saw a substantial improvement, with net income more than doubling in the six-month period. Cash flow from operations also demonstrated strong growth, indicating healthy operational efficiency. Agilent continues to focus on integrating its recent acquisitions, realizing cost and revenue synergies, and investing in research and development to maintain its competitive edge in the measurement solutions market. The company appears well-positioned for continued growth, supported by strong demand in key end-markets such as pharmaceutical, biotechnology, and petrochemical sectors.

Financial Highlights

56 data points
Beta

Revenue

$1.68B

53.7% Gross Margin

Net Income

$200.00M

11.9% Net Margin

EPS (Diluted)

$0.56

Total Assets

$8.65B

Cash & Equivalents

$2.98B

Free Cash Flow

$327.00M

Financial Statements
Beta
Revenue$1.68B
Cost of Revenue$777.00M
Gross Profit$900.00M
R&D Expenses$165.00M
SG&A Expenses$469.00M
Operating Expenses$1.41B
Operating Income$266.00M
Interest Expense$20.00M
Net Income$200.00M
EPS (Basic)$0.58
EPS (Diluted)$0.56
Shares Outstanding (Basic)347.00M
Shares Outstanding (Diluted)355.00M

Key Highlights

  • 1Total net revenue for the six months ended April 30, 2011, increased by 29% to $3.20 billion compared to $2.48 billion in the prior year, reflecting broad-based growth across segments.
  • 2Net income for the six months ended April 30, 2011, more than doubled to $393 million, up from $187 million in the same period last year.
  • 3Orders grew significantly across all segments, with Life Sciences up 38% and Chemical Analysis up 62% for the six-month period, indicating strong demand.
  • 4The acquisition of Varian, Inc., completed in May 2010, continues to be a significant contributor to revenue growth, with its impact noted across multiple segments.
  • 5Net cash provided by operating activities for the six months ended April 30, 2011, was $498 million, a substantial increase from $255 million in the prior year.
  • 6Agilent acquired three additional businesses in the first six months of 2011 for $96 million, further expanding its capabilities and market reach.
  • 7Electronic Measurement segment showed solid revenue growth of 21% for the six months ended April 30, 2011, driven by demand in general purpose end-markets like industrial, semiconductor, and computer sectors.

Frequently Asked Questions

The acquisition of Varian, Inc., completed in May 2010, had a significant positive impact on Agilent's financial performance. Varian's results are included in Agilent's consolidated statements, contributing substantially to the reported increases in orders and net revenue across all business segments, particularly Life Sciences and Chemical Analysis. The company expects to realize significant cost and revenue synergies from this integration.

The outlook appears positive across the board. Life Sciences and Chemical Analysis are experiencing strong order and revenue growth, driven by demand in pharmaceutical, biotechnology, and petrochemical markets, further enhanced by recent acquisitions. The Electronic Measurement segment also showed solid growth, benefiting from improved demand in industrial, semiconductor, and computer markets, with expectations for continued strength in wireless manufacturing and digital test businesses.

Agilent demonstrated strong operating cash flow generation, with $498 million provided by operating activities in the first six months of 2011, nearly double the previous year. The company utilized a significant portion of cash in financing activities, primarily for debt settlement and share repurchases. Agilent maintained a healthy cash balance of $2.98 billion as of April 30, 2011, with no borrowings outstanding under its credit facility.

The company faces risks related to depressed general economic conditions, which could reduce demand for its products. Dependence on contract manufacturing, the need for timely new product introductions, and potential intellectual property disputes are also noted risks. Furthermore, the successful integration of acquisitions, particularly Varian, remains critical to realizing expected synergies and avoiding potential integration challenges.