01—Abstract
Summary
Summary of the 10-Q filed September 6, 2013. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported a 4% decrease in net revenue to $1.65 billiona for the third quarter of fiscal year 2013, compared to the same period last year.
This decline was primarily driven by a significant 17% decrease in the Electronic Measurement segment, attributed to weak market conditions and the loss of a large customer. However, the Diagnostics and Genomics segment saw substantial growth, up 54%, largely due to the acquisition of Dako A/S. Net income for the quarter was $168 millionb, a decrease from $243 million in the prior year, impacted by factors including restructuring charges.
The company continues to face macroeconomic challenges, particularly in the Electronic Measurement segment. Despite the overall revenue decline, Agilent maintained a stable gross margin and demonstrated operational resilience in its Life Sciences and Chemical Analysis segments, which experienced modest revenue growth. The company also generated $775 millionc in operating cash flow for the nine months ended July 31, 2013, indicating strong cash generation capabilities despite revenue headwinds.
02—Key points
Key Highlights
- Net revenue for Q3 FY13 decreased by 4% to $1.65 billion compared to Q3 FY12.
- Net income for Q3 FY13 was $168 million, down from $243 million in Q3 FY12.
- The Diagnostics and Genomics segment experienced strong revenue growth of 54%, significantly boosted by the Dako A/S acquisition.
- The Electronic Measurement segment saw a sharp revenue decline of 17%, attributed to market weakness and customer-specific issues.
- Operating cash flow for the nine months ended July 31, 2013, was robust at $775 million.
- The company initiated a restructuring program impacting approximately 700 employees to reduce costs.
- Agilent repurchased $900 million of its common stock during the first nine months of FY13 as part of its enhanced share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2013, Agilent Technologies, Inc. kept $0.10.
- Revenue$1.65B100.0%
- Cost of revenue−$796.0M48.2%
- Gross profit$856.0M51.8%
- Operating costs−$620.0M37.5%
- Operating income$236.0M14.3%
- Interest, other & tax−$68.0M4.1%
- Net income$168.0M10.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2013filed September 6, 2013Financial Statements
Q3 FY2013 against Q3 FY2012
| Line item | Q3 FY2013Q3 FY2012 | Change |
|---|---|---|
| Revenue | $1.65B$1.72B | −4.1% |
| Cost of Revenue | $796.00M$833.00M | −4.4% |
| Gross Profit | $856.00M$890.00M | −3.8% |
| R&D Expenses | $171.00M$162.00M | +5.6% |
| SG&A Expenses | $449.00M$458.00M | −2.0% |
| Operating Expenses | $1.42B$1.45B | −2.5% |
| Operating Income | $236.00M$270.00M | −12.6% |
| Interest Expense | $27.00M$24.00M | +12.5% |
| Net Income | $168.00M$243.00M | −30.9% |
| EPS (Basic) | $0.50$0.70 | −28.6% |
| EPS (Diluted) | $0.49$0.69 | −29.0% |
| Shares Outstanding (Basic) | 339.00M348.00M | −2.6% |
| Shares Outstanding (Diluted) | 343.00M353.00M | −2.8% |
05—Questions
Frequently Asked Questions
What drove the decrease in revenue for Agilent Technologies in Q3 FY13?
The decrease in revenue was primarily driven by a significant 17% decline in the Electronic Measurement segment, influenced by weak market conditions and the loss of a major customer. The overall revenue decline was partially offset by strong growth in the Diagnostics and Genomics segment, largely due to the Dako acquisition.
How is the Dako acquisition impacting Agilent's financial performance?
The acquisition of Dako A/S has been a significant growth driver, particularly for the Diagnostics and Genomics segment, which saw a 54% revenue increase in Q3 FY13. This acquisition contributed substantially to both orders and revenue in this segment.
What is the company doing to address the challenges in the Electronic Measurement segment?
Agilent attributes the weakness in the Electronic Measurement segment to general market conditions and specific customer losses. While the filing doesn't detail specific remediation actions beyond general cost controls, the company is investing in new products and longer-term growth drivers like mobility and computing for this segment. The company also announced a restructuring program impacting approximately 700 employees to improve cost efficiencies across the business.
How is Agilent managing its cash flow and returning value to shareholders?
Agilent generated strong operating cash flow of $775 million for the first nine months of FY13. The company continued its share repurchase program, buying back $900 million of its stock in the same period, and also paid cash dividends to shareholders, demonstrating a commitment to returning capital.
06—Continue