01—Abstract
Summary
Summary of the 10-Q filed June 3, 2013. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported flat total net revenue of $1.732 billiona for the three months ended April 30, 2013, compared to the prior year, and a 1% increase to $3.412 billion for the six months ended April 30, 2013.
While overall revenue remained stable, the company experienced significant shifts across its business segments. The Diagnostics and Genomics segment saw substantial growth, largely driven by the acquisition of Dako A/S. Conversely, the Electronic Measurement segment experienced a notable decline in both orders and revenue.
Net income for the three and six-month periods decreased year-over-year to $166 millionb and $345 million, respectively, impacting diluted earnings per share. The company generated $560 million in operating cash flow for the six months ended April 30, 2013, an increase from the prior year.
Agilent also continued its capital return strategy, paying dividends and actively repurchasing shares under its enhanced share repurchase program. The company initiated a restructuring program aimed at reducing headcount and associated costs, anticipating a significant annual expense reduction.
02—Key points
Key Highlights
- Total net revenue was flat year-over-year for the three months ended April 30, 2013, at $1.732 billion, and increased 1% for the six months to $3.412 billion.
- Net income decreased year-over-year to $166 million for the three months and $345 million for the six months ended April 30, 2013.
- The Diagnostics and Genomics segment saw significant revenue growth (124% for 3 months, 134% for 6 months), heavily influenced by the Dako acquisition.
- The Electronic Measurement segment experienced a significant revenue decline of 13% for the three months and 10% for the six months ended April 30, 2013.
- Operating cash flow improved to $560 million for the six months ended April 30, 2013, up from $503 million in the prior year.
- The company announced a restructuring program targeting approximately 600 positions for reduction, aiming for approximately $50 million in annual cost savings.
- Agilent continued returning capital to shareholders through dividends and an increased share repurchase program, with $781 million remaining authorization as of May 14, 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2013, Agilent Technologies, Inc. kept $0.10.
- Revenue$1.73B100.0%
- Cost of revenue−$841.0M48.6%
- Gross profit$891.0M51.4%
- Operating costs−$678.0M39.1%
- Operating income$213.0M12.3%
- Interest, other & tax−$47.0M2.7%
- Net income$166.0M9.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2013filed June 3, 2013Financial Statements
Q2 FY2013 against Q2 FY2012
| Line item | Q2 FY2013Q2 FY2012 | Change |
|---|---|---|
| Revenue | $1.73B$1.73B | −0.1% |
| Cost of Revenue | $841.00M$815.00M | +3.2% |
| Gross Profit | $891.00M$918.00M | −2.9% |
| R&D Expenses | $181.00M$166.00M | +9.0% |
| SG&A Expenses | $497.00M$452.00M | +10.0% |
| Operating Expenses | $1.52B$1.43B | +6.0% |
| Operating Income | $213.00M$300.00M | −29.0% |
| Interest Expense | $25.00M$25.00M | 0.0% |
| Net Income | $166.00M$255.00M | −34.9% |
| EPS (Basic) | $0.48$0.73 | −34.2% |
| EPS (Diluted) | $0.48$0.72 | −33.3% |
| Shares Outstanding (Basic) | 345.00M348.00M | −0.9% |
| Shares Outstanding (Diluted) | 349.00M354.00M | −1.4% |
05—Questions
Frequently Asked Questions
How did Agilent's revenue performance vary across its business segments in this quarter?
Agilent experienced mixed segment performance. The Diagnostics and Genomics segment showed strong growth (over 120% revenue increase), largely due to the Dako acquisition. However, the Electronic Measurement segment saw significant declines in both orders and revenue (around 10-13% decrease). Life Sciences and Chemical Analysis segments showed modest growth or remained flat.
What is the financial impact of the Dako acquisition on Agilent's results?
The Dako acquisition significantly boosted revenue and orders for the Diagnostics and Genomics segment, contributing approximately 6 percentage points to overall revenue growth for both the three and six-month periods. However, it also contributed to increased operating expenses, including intangible amortization and restructuring costs.
What is the company doing to address current market challenges and improve efficiency?
Agilent has initiated a restructuring program targeting a reduction of approximately 600 employees across various functions, which is expected to yield about $50 million in annual cost savings. This is in response to a challenging macroeconomic environment and slow revenue growth.
How is Agilent managing its capital and returning value to shareholders?
The company generated $560 million in operating cash flow for the first six months of fiscal 2013. Agilent continued to pay quarterly cash dividends and repurchased a significant amount of its common stock under an expanded share repurchase program, with $781 million authorized for future repurchases as of May 14, 2013.
06—Continue