10-QPeriod: Q2 FY2013

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2013

Filed June 3, 2013For Securities:A

Summary

Agilent Technologies, Inc. reported flat total net revenue of $1.732 billion 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 million 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.

Financial Highlights

57 data points
Beta

Revenue

$1.73B

51.4% Gross Margin

Net Income

$166.00M

9.6% Net Margin

EPS (Diluted)

$0.48

Total Assets

$10.59B

Cash & Equivalents

$2.52B

Free Cash Flow

$264.00M

Financial Statements
Beta
Revenue$1.73B
Cost of Revenue$841.00M
Gross Profit$891.00M
R&D Expenses$181.00M
SG&A Expenses$497.00M
Operating Expenses$1.52B
Operating Income$213.00M
Interest Expense$25.00M
Net Income$166.00M
EPS (Basic)$0.48
EPS (Diluted)$0.48
Shares Outstanding (Basic)345.00M
Shares Outstanding (Diluted)349.00M

Key Highlights

  • 1Total 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.
  • 2Net income decreased year-over-year to $166 million for the three months and $345 million for the six months ended April 30, 2013.
  • 3The Diagnostics and Genomics segment saw significant revenue growth (124% for 3 months, 134% for 6 months), heavily influenced by the Dako acquisition.
  • 4The Electronic Measurement segment experienced a significant revenue decline of 13% for the three months and 10% for the six months ended April 30, 2013.
  • 5Operating cash flow improved to $560 million for the six months ended April 30, 2013, up from $503 million in the prior year.
  • 6The company announced a restructuring program targeting approximately 600 positions for reduction, aiming for approximately $50 million in annual cost savings.
  • 7Agilent continued returning capital to shareholders through dividends and an increased share repurchase program, with $781 million remaining authorization as of May 14, 2013.

Frequently Asked Questions

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.

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.

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.

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.